ATI Receives Buy Rating from J.P. Morgan with $75 Price Target

J.P. Morgan analyst Seth Seifman maintains a Buy rating on ATI with a $75.00 price target. The company's shares closed at $62.24. TipRanks rates Seifman as a 5-star analyst with an average return of 11.1% and a 63.94% success rate. The analyst consensus rating for ATI is Strong Buy with an average price target of $73.38, representing a 17.90% upside.

ATI Inc. reported its first-quarter 2025 earnings, surpassing analyst expectations with an adjusted earnings per share (EPS) of $0.72 against a forecast of $0.60. Revenue reached $1.14 billion, exceeding the projected $1.08 billion. As a result, ATI’s stock surged by 9.11%, reflecting investor optimism following the earnings announcement. According to InvestingPro data, ATI maintains a "GREAT" Financial Health Score of 3.19, with particularly strong profitability metrics [1].

Key Takeaways
ATI’s Q1 2025 EPS of $0.72 exceeded the forecast by 20%. Revenue grew 10% year-over-year to $1.14 billion, beating estimates. Stock price increased by 9.11% in pre-market trading. The Aerospace and Defense segment continues to drive growth. Full-year 2025 EPS guidance remains strong at $2.87-$3.09.

Company Performance
ATI demonstrated robust performance in Q1 2025, with a 10% year-over-year revenue increase. The company’s focus on the Aerospace and Defense sector, which constitutes 66% of total revenue, has been pivotal. This sector is projected to grow 12-14% in 2025, driven by strong demand in jet engine components and defense sales. The company’s strong execution is reflected in its impressive 23% return on equity and healthy current ratio of 2.44, indicating solid operational efficiency and financial stability.

Financial Highlights
Revenue: $1.14 billion, up 10% year-over-year. Adjusted EBITDA: $195 million, exceeding guidance by $15 million. Adjusted EPS: $0.72, surpassing the $0.55-$0.61 guidance range. Earnings vs. Forecast ATI’s Q1 2025 EPS of $0.72 represented a 20% surprise over the forecasted $0.60. Revenue also outperformed expectations by $60 million, indicating strong operational execution and market demand. This marks a significant positive deviation compared to previous quarters.

Market Reaction
Following the earnings release, ATI’s stock rose by 9.11%, reaching $59.34, a notable movement within its 52-week range of $39.23 to $68.92. This positive reaction reflects investor confidence in the company’s strategic direction and financial health. InvestingPro analysis indicates the stock is trading above its Fair Value, while maintaining a strong bullish analyst consensus of 1.36 (where 1 is Strong Buy).

Analyst Outlook
J.P. Morgan analyst Seth Seifman maintains a Buy rating on ATI with a $75.00 price target. The company's shares closed at $62.24. TipRanks rates Seifman as a 5-star analyst with an average return of 11.1% and a 63.94% success rate. The analyst consensus rating for ATI is Strong Buy with an average price target of $73.38, representing a 17.90% upside.

Outlook & Guidance
ATI maintains its full-year 2025 adjusted EBITDA guidance of $800-$840 million and EPS guidance of $2.87-$3.09. The company anticipates margin expansion in the second half of 2025, with HPMC margins expected to exceed 24%. With a P/E ratio of 19.2x and revenue growth of 4.51% over the last twelve months, ATI continues to demonstrate strong momentum.

References
[1] https://www.investing.com/news/transcripts/earnings-call-transcript-ati-q1-2025-beats-expectations-stock-surges-93CH-4017186