Celebrations may be in order for Allegheny Technologies Incorporated (NYSE:ATI) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.
Following the upgrade, the current consensus from Allegheny Technologies' six analysts is for revenues of US$3.4b in 2022 which - if met - would reflect a meaningful 16% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$3.1b in 2022. The consensus has definitely become more optimistic, showing a solid increase in revenue forecasts.
We'd point out that there was no major changes to their price target of US$32.25, suggesting the latest estimates were not enough to shift their view on the value of the business. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Allegheny Technologies analyst has a price target of US$38.00 per share, while the most pessimistic values it at US$28.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Allegheny Technologies shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Allegheny Technologies' past performance and to peers in the same industry. One thing stands out from these estimates, which is that Allegheny Technologies is forecast to grow faster in the future than it has in the past, with revenues expected to display 22% annualised growth until the end of 2022. If achieved, this would be a much better result than the 4.9% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to decline 2.4% per year. So it's pretty clear that Allegheny Technologies is expected to grow faster than the wider industry.
The Bottom Line
The highlight for us was that analysts increased their revenue forecasts for Allegheny Technologies this year. Analysts also expect revenues to perform better than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Allegheny Technologies.
Looking for more information? We have analyst estimates for Allegheny Technologies going out to 2024, and you can see them free on our platform here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.