Key Points
It was beat-and-raise time for the specialty materials company.
Its increases in core fundamentals were helped greatly by the performance of the aerospace and defense business.
Specialty materials producer ATI's (NYSE: ATI) stock has had quite a run lately. Its share price was rising by more than 13% week to date as of early Friday morning, according to data compiled by S&P Global Market Intelligence. Much of this was due to a beat-and-raise third quarter posted by the industrial company, aided by a pair of analyst price target increases.
Skyrocketing aerospace and defense revenue
ATI published that quarterly earnings digest on Tuesday, revealing that its total sales for the period were 7% higher year over year at $1.13 billion. This was helped significantly by the excellent performance of the company's pivotal aerospace and defense business, which experienced a 21% increase in its take to $793 million.
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This filtered down into a net profit not according to generally accepted accounting principles (GAAP) of over $119 million ($0.85 per share), representing a 12% increase over the year-ago quarter.
With those headline numbers, ATI beat the average analyst estimates. Pundits tracking the stock were modeling $1.12 billion on the top line, and only $0.73 for non-GAAP (adjusted) net income.
The obviously confident company raised both its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) and earnings guidance for full-year 2025. It now believes the latter metric will land at $3.15 to $3.21 per share, up from its previous outlook of $2.90 to $3.07.
Up, up, and away
That kind of performance rarely escapes the notice of the analyst community, and ATI's inspired two pundit price target raises. Susquehanna's Charles Minervino upped his by 20% to $120 per share from $100, while Deutsche Bank prognosticator Scott Deuschle hiked his own to $117 from $98. Both maintained their equivalents of buy recommendations.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.