NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and robust revenue growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.
Highlights from the ratings report include:
- ALLEGHENY TECHNOLOGIES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ALLEGHENY TECHNOLOGIES INC increased its bottom line by earning $0.70 versus $0.29 in the prior year. This year, the market expects an improvement in earnings ($2.75 versus $0.70).
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Metals & Mining industry average. The net income increased by 75.8% when compared to the same quarter one year prior, rising from $36.40 million to $64.00 million.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Metals & Mining industry and the overall market, ALLEGHENY TECHNOLOGIES INC's return on equity is below that of both the industry average and the S&P 500.
- The gross profit margin for ALLEGHENY TECHNOLOGIES INC is rather low; currently it is at 19.70%. Regardless of ATI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, ATI's net profit margin of 4.70% is significantly lower than the same period one year prior.
Allegheny Technologies Incorporated produces and sells specialty metals worldwide. The company has a P/E ratio of 35.1, below the average industrial industry P/E ratio of 35.4 and above the S&P 500 P/E ratio of 17.7. Allegheny has a market cap of $4.9 billion and is part of the
industry. Shares are down 19.8% year to date as of the close of trading on Friday.
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