2024-06-22 07:52:46 ET
Summary
- The AA&S segment remains weak but showing improvement, and the HPMC segment continues to show strength.
- Strong demand primarily in the A&D end market should continue to drive growth in the quarters ahead.
- Expected revenue growth, strong pricing and operational improvement should benefit margin.
- As things are improving and long-term prospects remain favorable, I am upgrading ATI to a BUY considering its discounted valuation.
The Thesis
The topline weakness of ATI ( ATI ) continued as it entered 2024, however, the company saw some improvement in the AA&S segment due to increased titanium shipment for airframes during the quarter. I expect the topline to grow in the coming quarters as the demand environment remains strong for the company's materials mainly in the A&D and medical end market. The capacity expansion initiative for titanium production also continued which should drive the company's sales in the coming years....
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ATI: Near Term Resistance, But Strong Long-Term Prospects And Decent Valuation (Rating Upgrade)