UPDATE: Credit Suisse Reiterates on Allegheny Technologies Following Management Meetings
In a report published Thursday, Credit Suisse analyst Julie Yates Stewart reiterated an Outperform rating on Allegheny Technologies (NYSE: ATI), and raised the price target from $41.00 to $47.00.
In the report, Credit Suisse noted, “Following management meetings with investors, we reiterate our positive thesis outlined in our January upgrade note. The stock has outperformed (+18% since Q4 report) due to nickel price appreciation (+15% YTD), positive commentary on aero titanium buys, and investor preferences shifting from growth to value. Mgmt was cautiously optimistic for a H2 recovery, as pricing has moved off the bottom and demand is showing signs of modest improvement. HRPF is on track and commissioning by YE will result in cost reductions in 2015 of ~$100-$110M (absence of $30-35M of startup costs + $70-75M in cost reductions).
"Applying a 13x mult on our 2016E yields a new TP of $47. Our 2014/2015/2016E EPS rise to $0.36/$2.25/$3.62 from $0.28/$2.15/$3.46 on recent base price hikes and greater confidence in cost reductions from HRPF in 2015 & Rowley PQ in 2016.”
Allegheny Technologies closed on Wednesday at $37.90.
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