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Here's Why You Should Add ATI Stock to Your Portfolio Now
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ATI Inc. (ATI - Free Report) is experiencing strong growth, propelled by robust demand, expanded capacity and an unwavering commitment to operational excellence.
As a Zacks Rank #1 (Strong Buy) stock, it presents an attractive investment option with growth prospects and an impressive earnings track record.
Estimates Going Up
The Zacks Consensus Estimate for ATI's second-quarter earnings has increased approximately 5.8% over the past three months. Similarly, the consensus estimate for 2023 has been revised around 3.7% upward during the same period.
Positive Earnings Surprise History
ATI has outperformed the Zacks Consensus Estimate in all of the last four quarters. It has delivered a trailing four-quarter average earnings surprise of 13%.
Healthy Growth Potential
The Zacks Consensus Estimate for 2023 earnings is currently pegged at $2.24, implying year-over-year growth of 12.6%. Moreover, earnings are expected to register 24.8% growth in 2024.
An Outperformer
ATI has shown strong price performance, gaining 103% in the past year, outperforming the industry’s rise of 89.7% during the same period.
Image Source: Zacks Investment Research
Robust Demand, Innovation and Expansion Drive ATI's Growth
The company continues to experience strong momentum in the aerospace and defense (A&D) sector, driving solid demand for its materials. Despite supply chain and delivery challenges, it remains optimistic about the industry's upward trajectory. Airframe sales have seen a remarkable 81% increase in the first quarter, while quarterly jet engine sales have grown by 58%. Defense sales also climbed 24%, with titanium armor, military jet engines and materials for allied naval systems leading the way. A&D markets now account for 56% of ATI's revenues, bringing them closer to its 65% sales target.
The energy sector has also contributed to ATI's success, with a 32% increase in sales driven by demand for materials in civilian nuclear power and conventional oil and gas applications. While the company has encountered challenges in smaller industrial markets and the Chinese market, particularly in electronics and automotive sectors, it remains optimistic about moderate growth in China. Operational excellence remains a key focus for ATI, aiming to enhance production output through improved efficiencies, increased product yields and diligent cost management.
ATI has made significant investments in state-of-the-art equipment and control systems to support its commercial transformation. The completion of the new Bright Anneal line Vandergrift, PA, marks the final step in transforming its Specialty Rolled Products business, enabling direct connections with major OEMs in key markets. These investments have resulted in remarkable 65% growth in first-quarter A&D revenues within the advanced alloys and solutions segment.
To address the unprecedented demand for titanium, the company is increasing its melt capacity. It is increasing production by 35% from existing titanium assets. This strategic response is crucial due to the global loss of access to a significant portion of the titanium supply. With expanding titanium capacity and improved operational efficiency, ATI is well-positioned to meet customer demand and capitalize on growth opportunities.
Looking ahead, ATI expects continued strength in the aerospace and defense sectors, supported by an increasing A&D mix and ongoing cost management initiatives. It has raised its adjusted EPS guidance for 2023 in the range of $2.10 to $2.30 per share, reflecting confidence in its ability to deliver strong financial performance. ATI continues to focus on maintaining a balanced capital deployment strategy, delivering value to shareholders while fulfilling its commitments.
The Zacks Consensus Estimate for L.B. Foster’s current-year earnings is pegged at 53 cents per share, indicating year-over-year growth of 112.5%. The company’s shares have gained around 5.9% in the past year. FSTR beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 140.5%, on average.
The Zacks Consensus Estimate for PPG’s current-year earnings has been revised 6.3% upward in the past 90 days. PPG beat the Zacks Consensus Estimate in three of the last four quarters and missed once, with the average earnings surprise being 6.8%. The company’s shares have gained 28.6% in the past year.
The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 0.7% upward in the past 60 days. Linde beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 6.9% on average. The company’s shares have risen roughly 32% in the past year.
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Here's Why You Should Add ATI Stock to Your Portfolio Now
ATI Inc. (ATI - Free Report) is experiencing strong growth, propelled by robust demand, expanded capacity and an unwavering commitment to operational excellence.
As a Zacks Rank #1 (Strong Buy) stock, it presents an attractive investment option with growth prospects and an impressive earnings track record.
Estimates Going Up
The Zacks Consensus Estimate for ATI's second-quarter earnings has increased approximately 5.8% over the past three months. Similarly, the consensus estimate for 2023 has been revised around 3.7% upward during the same period.
Positive Earnings Surprise History
ATI has outperformed the Zacks Consensus Estimate in all of the last four quarters. It has delivered a trailing four-quarter average earnings surprise of 13%.
Healthy Growth Potential
The Zacks Consensus Estimate for 2023 earnings is currently pegged at $2.24, implying year-over-year growth of 12.6%. Moreover, earnings are expected to register 24.8% growth in 2024.
An Outperformer
ATI has shown strong price performance, gaining 103% in the past year, outperforming the industry’s rise of 89.7% during the same period.
Image Source: Zacks Investment Research
Robust Demand, Innovation and Expansion Drive ATI's Growth
The company continues to experience strong momentum in the aerospace and defense (A&D) sector, driving solid demand for its materials. Despite supply chain and delivery challenges, it remains optimistic about the industry's upward trajectory. Airframe sales have seen a remarkable 81% increase in the first quarter, while quarterly jet engine sales have grown by 58%. Defense sales also climbed 24%, with titanium armor, military jet engines and materials for allied naval systems leading the way. A&D markets now account for 56% of ATI's revenues, bringing them closer to its 65% sales target.
The energy sector has also contributed to ATI's success, with a 32% increase in sales driven by demand for materials in civilian nuclear power and conventional oil and gas applications. While the company has encountered challenges in smaller industrial markets and the Chinese market, particularly in electronics and automotive sectors, it remains optimistic about moderate growth in China. Operational excellence remains a key focus for ATI, aiming to enhance production output through improved efficiencies, increased product yields and diligent cost management.
ATI has made significant investments in state-of-the-art equipment and control systems to support its commercial transformation. The completion of the new Bright Anneal line Vandergrift, PA, marks the final step in transforming its Specialty Rolled Products business, enabling direct connections with major OEMs in key markets. These investments have resulted in remarkable 65% growth in first-quarter A&D revenues within the advanced alloys and solutions segment.
To address the unprecedented demand for titanium, the company is increasing its melt capacity. It is increasing production by 35% from existing titanium assets. This strategic response is crucial due to the global loss of access to a significant portion of the titanium supply. With expanding titanium capacity and improved operational efficiency, ATI is well-positioned to meet customer demand and capitalize on growth opportunities.
Looking ahead, ATI expects continued strength in the aerospace and defense sectors, supported by an increasing A&D mix and ongoing cost management initiatives. It has raised its adjusted EPS guidance for 2023 in the range of $2.10 to $2.30 per share, reflecting confidence in its ability to deliver strong financial performance. ATI continues to focus on maintaining a balanced capital deployment strategy, delivering value to shareholders while fulfilling its commitments.
ATI Inc. Price and Consensus
ATI Inc. price-consensus-chart | ATI Inc. Quote
Zacks Rank & Other Key Picks
Some other top-ranked stocks in the basic materials space include L.B. Foster Company (FSTR - Free Report) and PPG Industries, Inc. (PPG - Free Report) , each sporting a Zacks Rank #1 and Linde Plc (LIN - Free Report) , carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for L.B. Foster’s current-year earnings is pegged at 53 cents per share, indicating year-over-year growth of 112.5%. The company’s shares have gained around 5.9% in the past year. FSTR beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 140.5%, on average.
The Zacks Consensus Estimate for PPG’s current-year earnings has been revised 6.3% upward in the past 90 days. PPG beat the Zacks Consensus Estimate in three of the last four quarters and missed once, with the average earnings surprise being 6.8%. The company’s shares have gained 28.6% in the past year.
The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 0.7% upward in the past 60 days. Linde beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 6.9% on average. The company’s shares have risen roughly 32% in the past year.