ATI (ATI) shares ended the last trading session 4.4% higher at $191.63. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 12.2% loss over the past four weeks.
ATI's gains reflect optimism over strong demand in its core Aerospace & Defense business, supported by next-generation jet-engine platforms and robust defense demand, including naval nuclear programs. The company's strategic investments in nickel capacity, targeted capital expenditures and operational improvements are strengthening production capabilities and supporting margin expansion, while record backlog and favorable demand across aerospace, defense and specialty energy markets are driving growth.
This maker of steel and specialty metals is expected to post quarterly earnings of $1.35 per share in its upcoming report, which represents a year-over-year change of +58.8%. Revenues are expected to be $1.33 billion, up 17.9% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For ATI, the consensus EPS estimate for the quarter has been revised marginally lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on ATI going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
ATI belongs to the Zacks Aerospace - Defense Equipment industry. Another stock from the same industry, Loar Holdings Inc. (LOAR), closed the last trading session 0.2% higher at $64.43. Over the past month, LOAR has returned -13.6%.
Loar Holdings Inc.'s consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.33. Compared to the company's year-ago EPS, this represents a change of -5.7%. Loar Holdings Inc. currently boasts a Zacks Rank of #1 (Strong Buy).
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This article originally published on Zacks Investment Research (zacks.com).