ATI - ATI +6% after Wolfe upgrade on strong margin expansion potential

ATI Inc. ( NYSE: ATI ) +5.7% in Friday's trading after Wolfe Research upgraded shares to Outperform from Market Perform with a $33 price target, following the specialty metals company's Q2 beat and raise .

Wolfe's Timna Tanners said she had been cautious on the pace of recovery and margin expansion potential, yet ATI's ( ATI ) strong Q2 and outlook persuaded her of the case for more upside for the stock.

While 10x EV/EBITDA exceeds ATI's ( ATI ) historical 8x-9x, Tanners believes a greater aerospace weighted portfolio can garner a higher multiple, in addition to projected EBITDA margin growth to ~16% in 2023 from a five-year average 11%, and her 2023 estimated EBITDA rises to $670M from $552M assuming sustained sales and margin growth, well above consensus $556M.

ATI ( ATI ) shares have jumped 80% YTD and 52% during the past year .

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