UPDATE: Deutsche Bank Downgrades Allegheny Technologies

In a report published Friday, Deutsche Bank analyst Jorge Beristain downgraded

to Hold from Buy. According to the report, following a tough year for coverage equities with an average gain of just 3 percent, fortunes change in 4Q. Steel/Specialty Metal stocks outperformed and rallied 36% due to rising spot/contract steel prices, restructuring efforts, trade cases and other factors. Estimates have been trimmed for ATI and stock has lowered to Hold given limited upside to the price target. “A US thermal coal recovery has quietly happened via better demand & lower inventories but we see no reason to alter our cautious longer-term outlook here,” the report noted. “As a result, coking coal fundamentals remain central to any thesis in our view. We did upgrade ANR in mid-2013 with a view that met coal prices were near a trough & market prices did recover considerably in 3Q. However, this rally was short-lived and the near-term outlook is clouded by slowing Asian growth & added supply. As a result, we've trimmed our met coal assumptions by 5-6% in 2014-15 and lowered EBITDA forecasts 8-9% on average, respectively. Lastly, these forecasts are now ~15% below consensus.” Key risks to ATI include FX rates, commodity demand and pricing, suply growth, operating costs, financial leverage, supply-chain inventories and public policy. ATI closed Thursday at $35.49.