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ATI's Shares Rally 53% YTD: Should You Buy the Stock Now?
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Key Takeaways
ATI's revenues jumped 26.5% in the third quarter, driven by strong aerospace and defense demand.
Capacity investments could boost nickel capacity 15-20% by early 2028 and add $350M in annual revenues.
ATI raised its 2026 EBITDA and adjusted EPS guidance, while strong cash flows support shareholder buybacks.
ATI Inc.’s (ATI - Free Report) shares have popped 53.2% year to date, outperforming the Zacks Aerospace - Defense Equipment industry’s decline of 12.3% and the S&P 500’s 7.2% increase. ATI is benefiting from investments in capacity expansion and consistent demand growth in its key sectors that aid volume growth and pricing. A raised outlook and margin expansion also boost investors’ confidence.
ATI’s peers, Carpenter Technology Corporation (CRS - Free Report) and Howmet Aerospace Inc. (HWM - Free Report) , have lost 11.6% and gained 0.4%, respectively, over the same period.
ATI’s YTD Price Performance
Image Source: Zacks Investment Research
Technical indicators show that ATI stock slipped below its 50-day simple moving average (SMA) on Sept. 10, 2026. It is currently trading below its 200-day SMA. Following a golden crossover on May 29, 2025, the 50-day SMA is reading higher than the 200-day SMA, indicating a bullish trend.
ATI Trades Below 50-Day SMA
Image Source: Zacks Investment Research
Let’s take a look at ATI’s fundamentals to analyze the stock better.
Aerospace and Defense Strength Fuels ATI’s Growth
ATI benefits from strong aerospace and defense demand, supporting solid multi-year growth prospects. Aerospace remains a key growth engine, with rising aircraft and next-generation jet engine production fueling demand for ATI’s proprietary nickel-based superalloys, titanium products, forgings and other specialty materials. The increasing adoption of next-generation engines further enhances this opportunity, as these platforms require greater amounts of advanced alloys per engine. Expanding defense opportunities and long-term customer agreements are also improving revenue visibility. This favorable outlook is further supported by recent upward revisions to the company’s expectations for both segments.
Strong aerospace and defense demand, favorable pricing and higher commercial jet engine sales supported the 26.5% growth in revenues in the third quarter. Aerospace and defense sales accounted for 69% of total revenues. ATI ended the third quarter with a backlog of approximately $4.3 billion, up 20% year over year. Jet engine revenues increased 39% year over year, and management raised the full-year jet engine revenue growth expectation to the low-to-mid-20% range from the previous high-teens outlook.
ATI's content on next-generation engines is more than double that of legacy platforms, positioning the company to benefit from a higher number of newer aircraft platforms. Airframe revenues increased 11%, while defense and specialty energy advanced 6% and 49%, respectively, in the third quarter. ATI continues to expect mid- to high single-digit airframe growth in 2026.
ATI’s Capacity Investments Add Upside
ATI's operational transformation is strengthening profitability. The elevATIon program has increased throughput, while targeted titanium and nickel investments are expected to raise nickel capacity by 15-20% by early 2028 and support approximately $350 million of incremental annual nickel-based revenues. ATI is making progress at its Mexico facility and Richland titanium furnace. Its raw-material recovery initiative is also expected to generate several million dollars in annual savings beginning in 2027. These initiatives, combined with a loyal customer base, position ATI for sustained earnings growth.
Raised Outlook Instills Investor Confidence in ATI Stock
For full-year 2026, ATI raised its adjusted EBITDA guidance to $1.19-$1.2 billion from the previous range of $1.135-$1.185 billion. The midpoint increased by $35 million, following a $125 million upward revision in the preceding quarter.
The company also increased its full-year adjusted earnings guidance to $5.17-$5.23 per share from $4.90-$5.18 previously. Adjusted free cash flow guidance remained unchanged at $550-$600 million.
Management attributed the stronger outlook to sustained demand supported by long-term agreements, differentiated manufacturing capabilities and disciplined operational execution. ATI expects these factors to support further growth in 2027.
Strong Financial Health Supports ATI’s Capital Allocation
ATI remains focused on enhancing shareholder value by strengthening and sustaining its cash flow generation. It reported adjusted free cash flow of $222.8 million for the year-to-date period ended Sept. 27, 2026, up 49% from the prior-year period.
ATI is taking steps to reduce seasonality and improve the consistency of its cash flows. Higher adjusted EBITDA and improved operating performance are supporting strong free cash flow generation, with healthy aerospace and defense demand expected to sustain cash generation.
Debt reduction, aided by stronger margins and improved cash flows, is enhancing ATI’s financial flexibility. The company also remains committed to returning capital to its shareholders through share repurchases, supported by disciplined and strategic capital allocation.
ATI considers buybacks the most efficient way to return capital to its shareholders. It returned $470 million to its shareholders in 2025 in the form of share repurchases. Following the $70 million repurchase in the third quarter, ATI has $425 million remaining under its current buyback authorization.
ATI’s Earnings Estimates Northbound
The Zacks Consensus Estimate for ATI’s 2026 earnings has been going up over the past 60 days. The consensus estimate for fourth-quarter 2026 earnings has also been revised upward over the same time frame.
The Zacks Consensus Estimate for 2026 earnings is currently pegged at $5.20, suggesting year-over-year growth of 60.5%. Earnings are expected to register roughly 67.7% growth in the fourth quarter.
Image Source: Zacks Investment Research
A Look at ATI’s Valuation
ATI is currently trading at a forward price-to-sales ratio of 4.25, below the industry. It is trading at a discount to Howmet Aerospace and at a premium to Carpenter Technology. ATI, Howmet Aerospace and Carpenter Technology currently have a Value Score of D, each.
ATI’s P/S F12M Vs. Industry, HWM and CRS
Image Source: Zacks Investment Research
Final Thoughts: Buy ATI Shares
Operational enhancements, portfolio optimization, pricing gains and a favorable product mix are helping ATI achieve stronger incremental margins. Along with the “elevATIon” program, these initiatives are designed to improve productivity and maximize output from existing assets. Collectively, these gains are expected to support ATI’s growth momentum and provide further upside potential.
ATI’s solid financial health, improving cash flows and disciplined capital allocation also add to its appeal. With strong demand visibility and healthy earnings growth prospects, ATI appears well-positioned to deliver value to its investors, making this Zacks Rank #2 (Buy) stock a prudent choice to bet on now.
View the Zacks #1 Rank List
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ATI's Shares Rally 53% YTD: Should You Buy the Stock Now?
Key Takeaways
ATI Inc.’s (ATI - Free Report) shares have popped 53.2% year to date, outperforming the Zacks Aerospace - Defense Equipment industry’s decline of 12.3% and the S&P 500’s 7.2% increase. ATI is benefiting from investments in capacity expansion and consistent demand growth in its key sectors that aid volume growth and pricing. A raised outlook and margin expansion also boost investors’ confidence.
ATI’s peers, Carpenter Technology Corporation (CRS - Free Report) and Howmet Aerospace Inc. (HWM - Free Report) , have lost 11.6% and gained 0.4%, respectively, over the same period.
ATI’s YTD Price Performance
Technical indicators show that ATI stock slipped below its 50-day simple moving average (SMA) on Sept. 10, 2026. It is currently trading below its 200-day SMA. Following a golden crossover on May 29, 2025, the 50-day SMA is reading higher than the 200-day SMA, indicating a bullish trend.
ATI Trades Below 50-Day SMA
Let’s take a look at ATI’s fundamentals to analyze the stock better.
Aerospace and Defense Strength Fuels ATI’s Growth
ATI benefits from strong aerospace and defense demand, supporting solid multi-year growth prospects. Aerospace remains a key growth engine, with rising aircraft and next-generation jet engine production fueling demand for ATI’s proprietary nickel-based superalloys, titanium products, forgings and other specialty materials. The increasing adoption of next-generation engines further enhances this opportunity, as these platforms require greater amounts of advanced alloys per engine. Expanding defense opportunities and long-term customer agreements are also improving revenue visibility. This favorable outlook is further supported by recent upward revisions to the company’s expectations for both segments.
Strong aerospace and defense demand, favorable pricing and higher commercial jet engine sales supported the 26.5% growth in revenues in the third quarter. Aerospace and defense sales accounted for 69% of total revenues. ATI ended the third quarter with a backlog of approximately $4.3 billion, up 20% year over year. Jet engine revenues increased 39% year over year, and management raised the full-year jet engine revenue growth expectation to the low-to-mid-20% range from the previous high-teens outlook.
ATI's content on next-generation engines is more than double that of legacy platforms, positioning the company to benefit from a higher number of newer aircraft platforms. Airframe revenues increased 11%, while defense and specialty energy advanced 6% and 49%, respectively, in the third quarter. ATI continues to expect mid- to high single-digit airframe growth in 2026.
ATI’s Capacity Investments Add Upside
ATI's operational transformation is strengthening profitability. The elevATIon program has increased throughput, while targeted titanium and nickel investments are expected to raise nickel capacity by 15-20% by early 2028 and support approximately $350 million of incremental annual nickel-based revenues. ATI is making progress at its Mexico facility and Richland titanium furnace. Its raw-material recovery initiative is also expected to generate several million dollars in annual savings beginning in 2027. These initiatives, combined with a loyal customer base, position ATI for sustained earnings growth.
Raised Outlook Instills Investor Confidence in ATI Stock
For full-year 2026, ATI raised its adjusted EBITDA guidance to $1.19-$1.2 billion from the previous range of $1.135-$1.185 billion. The midpoint increased by $35 million, following a $125 million upward revision in the preceding quarter.
The company also increased its full-year adjusted earnings guidance to $5.17-$5.23 per share from $4.90-$5.18 previously. Adjusted free cash flow guidance remained unchanged at $550-$600 million.
Management attributed the stronger outlook to sustained demand supported by long-term agreements, differentiated manufacturing capabilities and disciplined operational execution. ATI expects these factors to support further growth in 2027.
Strong Financial Health Supports ATI’s Capital Allocation
ATI remains focused on enhancing shareholder value by strengthening and sustaining its cash flow generation. It reported adjusted free cash flow of $222.8 million for the year-to-date period ended Sept. 27, 2026, up 49% from the prior-year period.
ATI is taking steps to reduce seasonality and improve the consistency of its cash flows. Higher adjusted EBITDA and improved operating performance are supporting strong free cash flow generation, with healthy aerospace and defense demand expected to sustain cash generation.
Debt reduction, aided by stronger margins and improved cash flows, is enhancing ATI’s financial flexibility. The company also remains committed to returning capital to its shareholders through share repurchases, supported by disciplined and strategic capital allocation.
ATI considers buybacks the most efficient way to return capital to its shareholders. It returned $470 million to its shareholders in 2025 in the form of share repurchases. Following the $70 million repurchase in the third quarter, ATI has $425 million remaining under its current buyback authorization.
ATI’s Earnings Estimates Northbound
The Zacks Consensus Estimate for ATI’s 2026 earnings has been going up over the past 60 days. The consensus estimate for fourth-quarter 2026 earnings has also been revised upward over the same time frame.
The Zacks Consensus Estimate for 2026 earnings is currently pegged at $5.20, suggesting year-over-year growth of 60.5%. Earnings are expected to register roughly 67.7% growth in the fourth quarter.
A Look at ATI’s Valuation
ATI is currently trading at a forward price-to-sales ratio of 4.25, below the industry. It is trading at a discount to Howmet Aerospace and at a premium to Carpenter Technology. ATI, Howmet Aerospace and Carpenter Technology currently have a Value Score of D, each.
ATI’s P/S F12M Vs. Industry, HWM and CRS
Final Thoughts: Buy ATI Shares
Operational enhancements, portfolio optimization, pricing gains and a favorable product mix are helping ATI achieve stronger incremental margins. Along with the “elevATIon” program, these initiatives are designed to improve productivity and maximize output from existing assets. Collectively, these gains are expected to support ATI’s growth momentum and provide further upside potential.
ATI’s solid financial health, improving cash flows and disciplined capital allocation also add to its appeal. With strong demand visibility and healthy earnings growth prospects, ATI appears well-positioned to deliver value to its investors, making this Zacks Rank #2 (Buy) stock a prudent choice to bet on now.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.