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On Tuesday, CFRA analyst Matthew Miller updated his financial outlook on Allegheny Technologies Incorporated (NYSE:ATI), hiking the 12-month price target from $68.00 to $75.00 while reiterating a Buy rating on the stock. The revision comes after Allegheny Technologies reported a strong fourth quarter, with adjusted earnings per share (EPS) of $0.79, surpassing the consensus estimate by $0.20, and a year-over-year revenue increase of 10% to $1.17 billion. The company’s strong performance has contributed to an impressive 48% return over the past year, according to InvestingPro data, which also indicates the stock is trading above its calculated Fair Value.
Miller’s increased target price is based on valuing ATI at an enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) multiple of 13.0 times his 2026 EBITDA estimate. This valuation is consistent with the multiples of ATI’s peers in the aerospace supplier sector. Currently trading at an EV/EBITDA of 18.52x and a P/E ratio of 20.86x, the stock reflects robust market confidence. Despite a slight reduction in the 2025 EPS estimate, now set at $3.00, down $0.22, Miller has initiated a 2026 EPS forecast at $3.55.
The company’s fourth-quarter performance was bolstered by a significant top-line beat of 9.7% and an expansion in adjusted EBITDA margin to 17.9%, up 280 basis points year-over-year. Notable growth was seen in defense market sales, which surged 32% year-over-year, and jet engine sales, which increased by 22% in the same period.
Miller attributes ATI’s solid quarterly results to improvements in operational efficiency and anticipates further margin expansion—approximately 150 basis points in 2025 and an additional 70 basis points in 2026. He commends ATI’s strong balance sheet and robust liquidity, which he believes positions the company to capitalize on the ongoing normalization of the aerospace and defense (A&D) supply chain. A&D represented 65% of ATI’s sales during the fourth quarter.
Looking forward, Miller forecasts a 21.5% growth in EPS for 2025, followed by a projected increase of 18%-20% in 2026, reflecting confidence in Allegheny Technologies’ continued financial improvement and market positioning. The company maintains a gross profit margin of 20.35% and generated total revenue of $4.25 billion in the last twelve months, demonstrating its strong market presence.
In other recent news, Allegheny Technology Inc. (ATI) has reported a robust fourth quarter, with earnings surpassing analyst estimates, driven by strong demand from the aerospace and defense sectors. The company’s adjusted earnings for Q4 2024 were $0.79 per share, exceeding the consensus estimate of $0.61, and revenue rose 10% year-over-year to $1.17 billion, outpacing expectations of $1.1 billion. Particularly noteworthy was the growth in ATI’s aerospace and defense segment, which accounted for 65% of Q4 sales.
In addition to the impressive Q4 results, ATI has also provided a positive outlook for 2025. The company projects full-year adjusted earnings of $2.80-$3.00 per share, considerably higher than the analyst consensus of $2.27. For Q1 2025, ATI expects earnings per share to be between $0.55 and $0.61.
These recent developments follow a successful year for ATI, with full-year 2024 sales of $4.4 billion marking the company’s highest since 2012. The positive results and outlook reflect the company’s strategic focus on high-value aerospace and defense markets.
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