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ATI Shares Surge 64% YTD: What's Driving the Momentum?
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Key Takeaways
ATI shares are up 64% YTD as aerospace and defense demand, backlog growth and margins strengthen.
Jet-engine revenue rose 13% in Q2 2026, while defense sales jumped 36% to a record $162 million.
ATI raised 2026 adjusted EBITDA to $1.135-$1.185B and free cash flow guidance to $550-$600M.
ATI Inc. (ATI - Free Report) shares have rallied 64% year to date.The company has also outperformed the Zacks Aerospace - Defense Equipment industry’s 6% decline and the S&P 500’s roughly 11.4% increase over the same period.
Image Source: Zacks Investment Research
Let's take a look at the factors driving ATI stock.
Aerospace Strength and Higher Margins Fuel Growth
ATI is supported by robust aerospace and defense demand, a record backlog and improving profitability. The company continues to benefit from strong production rates across the commercial aerospace industry that aided jet-engine revenue, increasing 13% year over year in the second quarter of 2026.
Defense sales were even stronger, rising 36% to a record $162 million. Following this, ATI also raised its full-year defense growth outlook to the high teens. A record $4.4 billion backlog, up 18% year over year and 7% sequentially, provides strong visibility into future sales. ATI is also well positioned to capitalize on growing demand for next-generation engines, naval nuclear programs and other defense applications, where its content on next-generation engines is more than double that of legacy platforms.
Margin Expansion and Raised Outlook Instill Investor Confidence
ATI’s earnings growth is boosting confidence in stronger profitability. Second-quarter adjusted EBITDA jumped 37% to $284.4 million, while the adjusted EBITDA margin expanded 440 basis points to 22.6%. Pricing, favorable product mix, higher volumes and productivity initiatives are supporting the margin gains.
The company also raised its 2026 adjusted EBITDA outlook to $1.135-$1.185 billion and adjusted free cash flow guidance to $550-$600 million. Targeted capacity investments and ATI’s newly adopted elevATIon program to maximize productivity of existing assets will also yield significant benefits.
ATI’s Zacks Rank & Key Picks
ATI currently sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the Basic Materials space are Reliance, Inc. (RS - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Avient Corporation (AVNT - Free Report) .
The Zacks Consensus Estimate for RS’ 2026 earnings is pegged at $22.23 per share, indicating a 55.89% year-over-year increase. RSshares have gained 32.3% over the past year.
The Zacks Consensus Estimate for CRS’ fiscal 2027 earnings is pegged at $13.28 per share, indicating a rise of 23.42% year over year. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 8.39%.
The Zacks Consensus Estimate for AVNT’s current-year earnings is pinned at $3.2 per share, indicating a 13.48% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 3.4%. AVNT’sshares have gained 15% over the past year.
View the Zacks #1 Rank List
Image: Bigstock
ATI Shares Surge 64% YTD: What's Driving the Momentum?
Key Takeaways
ATI Inc. (ATI - Free Report) shares have rallied 64% year to date.The company has also outperformed the Zacks Aerospace - Defense Equipment industry’s 6% decline and the S&P 500’s roughly 11.4% increase over the same period.
Image Source: Zacks Investment Research
Let's take a look at the factors driving ATI stock.
Aerospace Strength and Higher Margins Fuel Growth
ATI is supported by robust aerospace and defense demand, a record backlog and improving profitability. The company continues to benefit from strong production rates across the commercial aerospace industry that aided jet-engine revenue, increasing 13% year over year in the second quarter of 2026.
Defense sales were even stronger, rising 36% to a record $162 million. Following this, ATI also raised its full-year defense growth outlook to the high teens. A record $4.4 billion backlog, up 18% year over year and 7% sequentially, provides strong visibility into future sales. ATI is also well positioned to capitalize on growing demand for next-generation engines, naval nuclear programs and other defense applications, where its content on next-generation engines is more than double that of legacy platforms.
Margin Expansion and Raised Outlook Instill Investor Confidence
ATI’s earnings growth is boosting confidence in stronger profitability. Second-quarter adjusted EBITDA jumped 37% to $284.4 million, while the adjusted EBITDA margin expanded 440 basis points to 22.6%. Pricing, favorable product mix, higher volumes and productivity initiatives are supporting the margin gains.
The company also raised its 2026 adjusted EBITDA outlook to $1.135-$1.185 billion and adjusted free cash flow guidance to $550-$600 million. Targeted capacity investments and ATI’s newly adopted elevATIon program to maximize productivity of existing assets will also yield significant benefits.
ATI’s Zacks Rank & Key Picks
ATI currently sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the Basic Materials space are Reliance, Inc. (RS - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Avient Corporation (AVNT - Free Report) .
While RS currently sports a Zacks Rank #1, CRS and AVNT carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for RS’ 2026 earnings is pegged at $22.23 per share, indicating a 55.89% year-over-year increase. RSshares have gained 32.3% over the past year.
The Zacks Consensus Estimate for CRS’ fiscal 2027 earnings is pegged at $13.28 per share, indicating a rise of 23.42% year over year. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 8.39%.
The Zacks Consensus Estimate for AVNT’s current-year earnings is pinned at $3.2 per share, indicating a 13.48% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 3.4%. AVNT’sshares have gained 15% over the past year.