- 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.
For further details see:
Allegheny Technologies Setting Up For Higher Highs As Aerospace Recovers