ARNC - Allegheny Technologies Setting Up For Higher Highs As Aerospace Recovers

• Allegheny is heavily leveraged to the multiyear commercial aerospace recovery / expansion cycle, with higher content in engines and airframes.
• Exiting the commodity stainless steel business will boost margins and an improved pension situation should allow management to share upcoming free cash flow generation with shareholders.
• As capacity utilization improves and management's strategic moves come into play, I see upside to current Street estimates for FY22-FY25.
• A 9.5x multiple on my '24 EBITDA estimate, discounted back, supports a near-term fair value in the low $30s.

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