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Universal Stainless (USAP) Hits 52-Week High: What's Driving It?

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Universal Stainless & Alloy Products, Inc.’s (USAP - Free Report) shares touched a new 52-week high of $27.1 on Apr 4, before closing at $26.

In the past year, the stock has risen 185.7% compared with the industry’s 23.6% growth.

Zacks Investment Research
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What’s Driving the Company?

In the fourth quarter of 2023, USAP showed strong performance. It reported earnings of 27 cents per share against a loss of 41 cents per share in the preceding year. This turnaround signifies a significant stride forward for the company, reflecting its resilient strategy and strategic advancements.

A highlight of this reporting period is USAP's exceptional sales growth, reaching a record $79.8 million, up a substantial 42% from the prior-year level. This was primarily propelled by outstanding performances in both specialty alloys and premium alloys segments, which experienced impressive year-over-year surges of 37% and 56%, respectively. Particularly noteworthy is the aerospace sector, which saw sales surge roughly 55% to a record $61.9 million, underscoring USAP's robust position within this pivotal market segment.

USAP's strategic direction towards diversification and innovation is clearly evident in its sales distribution across various end markets. While aerospace remains a fundamental pillar of its success, the company has showcased adaptability and resilience by achieving growth in sectors such as heavy equipment and general industrial, thereby enhancing its overall market presence.

Furthermore, Universal Stainless' forward-thinking approach is manifested in its substantial backlog, with premium alloys constituting more than a third of its current backlog. Combined with the sustained solid demand in aerospace, this positions the company favorably for continued success in 2024 and beyond.

USAP has a trailing four-quarter average earnings surprise of 44.4%. The Zacks Consensus Estimate for 2024 earnings is pegged at $1.50 per share, indicating a staggering 183% increase from the previous year’s levels.

Zacks Rank & Key Picks

Universal Stainless currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation (CRS - Free Report) and Ecolab Inc. (ECL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy), and Innospec Inc. (IOSP - 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 consensus estimate for CRS’ current fiscal year earnings is pegged at $4 per share, indicating a year-over-year surge of 250.9%. CRS beat on earnings in each of the last four quarters, delivering an average surprise of 12.2%. The company’s shares have risen 84.8% in the past year.

Ecolab has a projected earnings growth rate of 22.65% for the current year. The Zacks Consensus Estimate for ECL’s current-year earnings has been revised upward by 5.4% in the past 60 days. ECL beat on earnings in each of the last four quarters, delivering an average surprise of 1.7%. The company’s shares have rallied 34.4% in the past year.

The consensus estimate for IOSP’s current fiscal year earnings is pegged at $6.72 per share, indicating a 10.3% year-over-year increase. IOSP beat on earnings in each of the last four quarters, delivering an average surprise of 10.5%. The company’s shares have risen 21.2% in the past year.

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