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ATI Unveils Growth Plan, Targets Revenues of Over $5B by 2027

ATI Inc. (ATI) unveiled ambitious targets for the upcoming years during its much-anticipated 2023 Investor Update. As a prominent player in the aerospace and defense sector, the company is strategically focusing on these markets to surpass $5 billion in revenues and achieve an adjusted EBITDA of $1 billion by 2027. This optimistic outlook follows a successful 2023, solidifying ATI's position for significant cash generation and increased value for its shareholders.

ATI revised its 2025 targets, projecting revenues between $4.5 billion and $4.6 billion, with adjusted EBITDA in the range of $0.8-$0.9 billion. The company reaffirmed its commitment to strong financial performance, with a free cash flow conversion exceeding 90% of adjusted net income and managed working capital remaining below 30% of sales.

ATI has unveiled new targets for 2027, anticipating revenues between $5.2 and $5.4 billion and adjusted EBITDA ranging from $1 to $1.2 billion. The company aims to maintain a robust free cash flow conversion of over 90% and managed working capital below 30% of sales in 2027, underscoring its commitment to sustained financial excellence.

ATI emphasized its strategic focus on aerospace and defense, with a goal to secure 65% of revenues from these high-growth markets. It highlighted the advantages of an integrated ATI, combining superior materials science expertise and advanced process technologies to serve strategic customers with disciplined operational execution. The company's results reflect its success in gaining market share, expanding capacity and increasing shareholders’ value.

The company announced a new share repurchase authorization of $150 million, set to begin in 2024. This move reflects its confidence in its future financial performance and underscores its commitment to a balanced capital allocation strategy. The allocation strategy aims to fund profitable growth, further de-leverage the balance sheet and provide returns to shareholders.

ATI's comprehensive growth strategy, highlighted by robust financial targets and a clear market focus, positions the company as a key player in the aerospace and defense sectors. With a commitment to disciplined execution and continued investment in advanced technologies, ATI looks poised for sustained success, making it an intriguing prospect for investors seeking exposure to high-growth markets.

ATI Inc. Price and Consensus

 

ATI Inc. Price and Consensus
ATI Inc. Price and Consensus

ATI Inc. price-consensus-chart | ATI Inc. Quote

 

Zacks Rank & Key Picks

ATI currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Basic Materials space areAxalta Coating Systems Ltd. AXTA, sporting a Zacks Rank #1 (Strong Buy), and The Andersons Inc. ANDE and Alamos Gold Inc. AGI, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for AXTA’s current year earnings is pegged at $1.58, indicating year-over-year growth of 6.8%. AXTA beat the Zacks Consensus Estimate in three of the last four quarters and missed one, with the average earnings surprise being 6.67%. The company’s shares have rallied 16.6% in the past year.

The Zacks Consensus Estimate for ANDE’s current-year earnings has been revised upward by 5.1% in the past 60 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 32.8% on average. ANDE’s shares have rallied around 36.9% in a year.

The consensus estimate for Alamos’ current fiscal year earnings is pegged at 53 cents, indicating year-over-year growth of 89.3%. AGI beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 25.6%. The company’s shares have increased 47.7% in the past year.

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Alamos Gold Inc. (AGI) : Free Stock Analysis Report

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