The Pittsburgh-based steel producer's rating was downgraded after its third quarter earnings results missed analysts' expectations, the firm said. Allegheny Technologies reported a loss of $1.35 per share for the most recent quarter.
Allegheny Technologies' recovery may not begin until the second half of 2016, Deutsche Bank said in an analyst note.
"The company clearly faces a weaker-than expected stainless steel pricing environment as demand in its Flat Rolled products missed sharply," Deutsche Bank continued. "Further, we question when management will hit projected numbers as expected recoveries continue to be 'pushed' over the horizon in what is becoming an all-too-familiar pattern."
Deutsche Bank lowered it's EBITDA projections on Allegheny Technologies by 59% to $146 million for 2015 and by 39% to $350 million for 2016.
Shares of Allegheny Technologies were down 6.20% to $14.07 during mid-morning trading on Monday.
Separately, TheStreet Ratings team rates ALLEGHENY TECHNOLOGIES INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
We rate ALLEGHENY TECHNOLOGIES INC (ATI) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, deteriorating net income, poor profit margins and feeble growth in its earnings per share.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 43.39%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 400.00% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 310.0% when compared to the same quarter one year ago, falling from -$4.00 million to -$16.40 million.
- The gross profit margin for ALLEGHENY TECHNOLOGIES INC is currently extremely low, coming in at 12.22%. Regardless of ATI's low profit margin, it has managed to increase from the same period last year.
- ALLEGHENY TECHNOLOGIES INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ALLEGHENY TECHNOLOGIES INC continued to lose money by earning -$0.02 versus -$0.93 in the prior year. For the next year, the market is expecting a contraction of 2925.0% in earnings (-$0.61 versus -$0.02).
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, ALLEGHENY TECHNOLOGIES INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- You can view the full analysis from the report here: ATI