UBS Financial Reiterates Buy on Allegheny Tech After Meeting with Management (ATI)
2/19/2010-UBS Financial reiterates its Buy rating on Allegheny Technologies (NYSE: ATI) and its price target of $50.00.
UBS analysts said, "We met with mgmt in Pittsburgh recently and got an update on both the near-term and longer-term earnings recovery. CEO Pat Hassey sees 2010 as a transitional year to visibility for key growth drivers in aerospace, deep sea drilling, and nuclear/transformer demand. ATI expects volume recovery and new higher-margin products to drive margins akin to peak, without relying on prices at the last peak.
"Titanium scrap prices are up ~30% in recent weeks, and mgmt and a Ti scrap source called this a positive sign. Both said jet engine destocking was nearly over, echoed recently by CRS and RTI. ATI saw demand up for offshore drilling, where they supply corrosion-resistant deep sea products. They were encouraged by Obama's hearty nuclear endorsement as ATI is one of few hafnium/zirconium suppliers."
Allegheny Technologies is expected to report Q4 earnings on Tuesday, February 22.
Write to Chip Brian at cbrian@tradethetrend.com
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