ATI: Capacity Expansion and Mix Shift Drive Multiyear Margin and Growth Upside

TD Cowen analyst Gautam Khanna has maintained their bullish stance on ATI stock, giving a Buy rating today.

Gautam Khanna has given his Buy rating due to a combination of factors that underscore ATI’s attractive growth and profitability outlook. He highlights the planned addition of a new nickel alloy VIM furnace, which will expand nickel alloy capacity by high single digits and is already largely backed by customer contracts, providing strong visibility into future revenue. This furnace is expected to generate roughly $350 million in annual sales at an EBITDA margin above 30% once fully ramped, with customers also sharing in the capital investment, which reduces ATI’s risk and upfront burden. He also notes that management ordered the equipment ahead of the formal announcement, suggesting confidence in sustained demand.

Gautam also bases his rating on a solid multiyear financial trajectory, starting with a robust 2026 outlook where revenue growth is evenly driven by pricing/mix and volumes and profitability improves across segments. He points to expected margin expansion in both HPMC and AA&S, with second-half 2026 performance set to be stronger due to pricing actions, increased aerospace build rates, and easing of titanium destocking. The new CFO’s comments indicate that ATI may achieve the upper end of its 2027 EBITDA margin guidance, further supporting the long-term earnings story. Additionally, he notes that ATI is shifting capacity away from lower-margin end markets like Electronics, Medical, and Industrial toward higher-margin areas such as Specialty Energy, where a new long-term agreement significantly increases ATI’s market share, enhancing the company’s overall margin and growth profile.

Khanna covers the Industrials sector, focusing on stocks such as Carpenter Technology, Hexcel, and Transdigm Group. According to TipRanks, Khanna has an average return of 21.3% and a 75.70% success rate on recommended stocks.

In another report released today, J.P. Morgan also maintained a Buy rating on the stock with a $150.00 price target.