Allegheny Technologies Incorporated (ATI): The Old Roof Became A New Floor

Allegheny Technologies Incorporated (NYSE:ATI) is now being followed by Macquarie, as they initiated the stock at Outperform on February 14. Analysts at Berenberg, started covering the stock on December 06 with a Buy rating. The stock won favor of Longbow analysts who expressed their confidence in it using an upgrade from Neutral to Buy on November 06. JP Morgan analysts came out with bullish views on October 24 when the call was made. They think the stock is now Neutral compared to to their prior call for Underweight.

ATI stock dropped -0.36% in recent trade and currently has a stock-market value of $3.26B. The shares finished at $25.2, after trading as low as $25 earlier in the session. It hit an intraday high Thursday at $25.53. Trading activity significantly weakened as the volume at ready counter decreased to 1,095,514 shares versus 1,260,470 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 1,565,778 shares. The stock is now 20.92% above against its bear-market low of $20.84 on December 26, 2018. It has retreated -19.76% since it’s 52-week high of $30.18 reached in September. Now the market price is down -10.16% on the year and up 15.76% YTD.

Wall Street’s most bullish Allegheny Technologies Incorporated (NYSE:ATI) analysts are predicting the share price to blow past $40 per share during the next 12 months. The current median share price forecast by them is $35, suggesting that the stock could increase 38.89% in that time frame. The average price target of $33.75 calls for a nearly 33.93% increase in the stock price.

Allegheny Technologies Incorporated (ATI)’s 50 day simple moving average (SMA 50) price is $26.5 and its 200-day simple moving average (SMA 200) price is $26.58. The company’s stock currently has a total float of 124.58M shares. Its weekly volatility is hovering around 3.36% and felt 2.68% volatility in price over a month. On the upside, the share price will test short term resistance at around $25.49. On a downside, the stock is likely to find some support, which begins at $24.96. The failure to get near-term support could push it to $24.71.

When looking at valuations, Allegheny Technologies Incorporated (ATI) has a cheap P/E of 15.25x as compared to industry average of 3509.63x. Moreover, it trades for 9.73 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 1.68x price/book and 0.81x price/sales. Compared to others, Allegheny Technologies Incorporated is in a different league with regards to profitability, having net margins of 5.5%. To put some perspective around this, the industry’s average net margin is 2.92%. ATI’s ROE is 11.6%, which is also considerably better than the industry’s ROE of 1.24%. It’s also very liquid in the near term, with a current ratio of 2.7. The stock has a debt/capital of 0.82.

Shares of ATI have dropped -0.7% since the company’s most recent earnings report. Over the past 12 fiscal quarters, Allegheny Technologies Incorporated (NYSE:ATI) has topped consensus earnings estimates in 8 quarters (66%), missed earnings in 3 quarters (25%), whereas at 1 occasion EPS met analyst expectations. ATI last reported earnings that receded expectations. The company raked in $0.31 per share, -96.9% change on the same period last year. That was worse than consensus for $0.34. Revenue for the recent quarter stood at $1.04 billion, up 14% on last year and above the $992.43 million predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $955 million to $1.03 billion, which should be compared with $1.02 billion generated last year. EPS is seen in a range of $0.16 to $0.34, against the $0.51 reported a year ago.