We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Allegheny (ATI) Gains 31% Over a Year: What's Driving it?
Read MoreHide Full Article
Shares of Allegheny Technologies Incorporated (ATI - Free Report) have rallied 31.2% over the past year, outperforming the industry’s gain of roughly 16.9%.
Allegheny has a market cap of roughly $3 billion and average volume of shares traded in the last three months was around 2,017.2K.
Let’s take a look at the factors that are driving this Zacks Rank #1 (Strong Buy) stock.
Driving Factors
Forecast-topping fourth-quarter 2017 earnings performance and bright prospects from its recent joint venture (JV) deal with the Tsingshan Group have contributed to the rally in Allegheny’s shares.
Allegheny’s adjusted earnings for the fourth quarter came in at 27 cents per share, which surpassed the Zacks Consensus Estimate of 14 cents. Notably, the company has surpassed the Zacks Consensus Estimate in three of the four trailing quarters, with an average positive surprise of 41.7%.
Allegheny expects continued operating margin improvement and revenue growth in its High Performance Metals and Components unit in 2018 resulting from improved asset utilization and ongoing aerospace market demand growth. The company also expects its Flat Rolled Products (FRP) unit to build on the operational improvements and product mix benefits attained last year and increase operating margins.
Last month, Allegheny and Tsingshan Group formed their previously announced 50-50 JV deal to produce 60-inch wide stainless sheet products for the North American market. The JV will be a 50-50 equity investment with the partners sharing its cash flows and operating profit. Moreover, all necessary regulatory and anti-trust clearances for the JV have been received on time and initial customer shipments are expected in the first half of 2018.
The JV will offer cost competitive stainless sheet products made for the North American market through a unique combination of Allegheny’s innovative, low-cost Hot Rolling and Processing Facility (HRPF) and Tsingshan’s unparalleled Indonesian refining, mining and castings assets, and the JV’s unique Direct Roll Anneal and Pickle facility in Midland, PA.
The JV supports Allegheny’s considerable investment in the U.S. manufacturing operations, especially its HRPF facility, which will provide value addition to the processing services for the JV’s finished products.
Per the company, this move will also benefit its FRP unit that employs more than 2,000 people in the United States. Moreover, the JV will lay foundations for the company’s long-term objectives and additionally support job creation in the United States by directly creating roughly 100 manufacturing jobs in Western Pennsylvania.
Allegheny Technologies Incorporated Price and Consensus
LyondellBasell has an expected long-term earnings growth rate of 9%. Its shares have moved up 14.8% over a year.
CF Industries has an expected long-term earnings growth rate of 6%. Its shares have gained 26.5% over a year.
Daqo New Energy has an expected long-term earnings growth rate of 7%. Its shares have rallied 175.3% over a year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Allegheny (ATI) Gains 31% Over a Year: What's Driving it?
Shares of Allegheny Technologies Incorporated (ATI - Free Report) have rallied 31.2% over the past year, outperforming the industry’s gain of roughly 16.9%.
Allegheny has a market cap of roughly $3 billion and average volume of shares traded in the last three months was around 2,017.2K.
Let’s take a look at the factors that are driving this Zacks Rank #1 (Strong Buy) stock.
Driving Factors
Forecast-topping fourth-quarter 2017 earnings performance and bright prospects from its recent joint venture (JV) deal with the Tsingshan Group have contributed to the rally in Allegheny’s shares.
Allegheny’s adjusted earnings for the fourth quarter came in at 27 cents per share, which surpassed the Zacks Consensus Estimate of 14 cents. Notably, the company has surpassed the Zacks Consensus Estimate in three of the four trailing quarters, with an average positive surprise of 41.7%.
Allegheny expects continued operating margin improvement and revenue growth in its High Performance Metals and Components unit in 2018 resulting from improved asset utilization and ongoing aerospace market demand growth. The company also expects its Flat Rolled Products (FRP) unit to build on the operational improvements and product mix benefits attained last year and increase operating margins.
Last month, Allegheny and Tsingshan Group formed their previously announced 50-50 JV deal to produce 60-inch wide stainless sheet products for the North American market. The JV will be a 50-50 equity investment with the partners sharing its cash flows and operating profit. Moreover, all necessary regulatory and anti-trust clearances for the JV have been received on time and initial customer shipments are expected in the first half of 2018.
The JV will offer cost competitive stainless sheet products made for the North American market through a unique combination of Allegheny’s innovative, low-cost Hot Rolling and Processing Facility (HRPF) and Tsingshan’s unparalleled Indonesian refining, mining and castings assets, and the JV’s unique Direct Roll Anneal and Pickle facility in Midland, PA.
The JV supports Allegheny’s considerable investment in the U.S. manufacturing operations, especially its HRPF facility, which will provide value addition to the processing services for the JV’s finished products.
Per the company, this move will also benefit its FRP unit that employs more than 2,000 people in the United States. Moreover, the JV will lay foundations for the company’s long-term objectives and additionally support job creation in the United States by directly creating roughly 100 manufacturing jobs in Western Pennsylvania.
Allegheny Technologies Incorporated Price and Consensus
Allegheny Technologies Incorporated Price and Consensus | Allegheny Technologies Incorporated Quote
Other Stocks to Consider
Some other top-ranked stocks worth considering in the basic materials space are LyondellBasell Industries N.V. (LYB - Free Report) , CF Industries Holdings, Inc. (CF - Free Report) and Daqo New Energy Corp. (DQ - Free Report) , each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
LyondellBasell has an expected long-term earnings growth rate of 9%. Its shares have moved up 14.8% over a year.
CF Industries has an expected long-term earnings growth rate of 6%. Its shares have gained 26.5% over a year.
Daqo New Energy has an expected long-term earnings growth rate of 7%. Its shares have rallied 175.3% over a year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>