Allegheny Hits New 52-Week High - Analyst Blog

Shares of Allegheny Technologies ATI reached a new 52-week high of $40.94 on Apr 14, above its previous high of $39.94. The stock closed the day at $40.61.

Allegheny's shares have recorded a one-year return of roughly 40%. The company's long-term estimated earnings per share EPS growth rate is 15%. Average volume of shares traded over the last three months was around 1,487K.

What's Driving Allegheny Up?

Allegheny's consolidated profit for the fourth quarter of 2013, reported on Jan 22, jumped manifold to $173.4 million or $1.62 per share. The company's adjusted loss from continuing operations for the quarter was narrower than the Zacks Consensus Estimate.
 
Allegheny, a Zacks Rank #3 (Hold) stock, is seeing healthy demand from aerospace OEMs, driven by production ramp ups. It should gain from its diversified global growth markets and differentiated product mix.

Allegheny envisions business conditions to gradually improve through 2014. The company anticipates market conditions to remain favorable across many of its major markets over the next 2–5 years.

Moreover, Allegheny expects continued increase in aerospace build rates. It expects capital spending on global oil and gas exploration and production forecasts project to remain strong.

Allegheny is in the process of completing several self-funded capital projects, which will help it to augment organic growth. The company's $1.2 billion Hot-Rolling and Processing Facility (HRPF) project remains on schedule and is expected to complete the cold and hot-commissioning process in 2014. The HRPF facility is expected to significantly boost capabilities of the company's Flat-Rolled Products division.  

Moreover, Allegheny continues to improve its cost structure with its gross cost reduction initiative. The company exceeded its target of at least $100 million in cost reductions in 2013 and achieved roughly $141 million in gross cost reduction during the year, partly through operating cost reductions and productivity improvements. Allegheny expects at least $100 million in gross cost reductions in 2014.

Other Stocks to Consider

Other metals companies worth considering include NN Inc. NNBR, Century Aluminum Co. CENX and NSK Ltd. (NPSKY). While NN retains a Zacks Rank #1 (Strong Buy), both Century Aluminum and NSK carry a Zacks Rank #2 (Buy).