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Allegheny (ATI) Rallies 67.3% in a Year: What's Driving It?

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Shares of Allegheny Technologies Inc. (ATI - Free Report) have soared 67.3% over a year. The Pittsburgh, PA-based company is a diversified manufacturer of technically advanced specialty materials and complex components. The industry, to which the company belongs, moved up 42.3% in the past one year.


Allegheny has a market cap of roughly $3 billion. Also, the stock has seen the Zacks Consensus Estimate for current-year earnings being revised 6.7% upward over the last 60 days.

Let’s take a look at the factors driving this stock of late.

Driving Factors

Allegheny, in October 2017, announced that it expects the High Performance Metals and Components (HPMC) unit to maintain robust performance especially in the commercial aerospace. Further, the company expects the unit to deliver improved results in the fourth quarter compared with the third.

The Flat-Rolled Products unit is expected to benefit from increasing raw material prices in the fourth quarter. The company sees operational improvements and product mix benefits to be carried over in 2018.

Allegheny anticipates significant profit improvement opportunities in 2018, aided by the completion of the start-up and qualification of its new nickel alloys powder facility.

Allegheny should benefit from improved performance in its HPMC unit. The company witnessed strong sales of jet engine products in the most recent quarter. Commercial aircraft manufacturers now have new generation programs which Allegheny is well positioned to serve.

The company remains on track with its cost-reduction and restructuring measures. These actions are expected to improve Allegheny’s annual operating income by about $50 million starting in 2017 and generate cash flow of about $50 million from reduced managed working capital.

Allegheny Technologies Incorporated Price and Consensus



Zacks Rank & Stocks to Consider

Allegheny carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Kronos Worldwide Inc. (KRO - Free Report) , Koppers Holding Inc. (KOP - Free Report) and Huntsman Corporation (HUN - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kronos Worldwide has expected long-term earnings growth of 5%. Its shares have skyrocketed 105.9% yearly.

Koppers has expected long-term earnings growth of 18%. Shares of the company have rallied 25.3% yearly.

Huntsman has expected long-term earnings growth of 8%. Its shares have soared 74.6% year to date.

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