Allegheny Technologies Up After Rolls Royce Deal

NEW YORK (AP) — Shares of Allegheny Technologies Inc. advanced Tuesday after the titanium supplier signed a supply contract with jet engine maker Rolls Royce PLC that could be worth as much as $1 billion.

The 10-year agreement with Allegheny Technologies unit ATI Allvac entails supply of nickel-based superalloy disc-quality products for commercial jet engine applications.

The contract is expected to result in revenue of $750 million to $1 billion.

Stifel Nicolaus analyst Stephen Levenson called the contract "a good deal" and reiterated his "Buy" rating on Allegheny stock.

"We believe the timing is right for investors to look at ATI shares as a way to participate in the economic recovery and what we believe will be a resurgence in commercial aerospace where Allegheny should see leverage through new models with higher titanium content that should come to represent a greater percentage of aircraft deliveries," Levenson wrote in a client note.

In midday trading, shares rose $1.75, or 6 percent, to $31.56.