Air travel continues to recover, and airlines continue to look to refresh and expand their fleets, but the progression of the commercial aerospace recovery in 2022 has been choppier than expected. Orders continue to come in and lead-times continue to stretch for key materials and components, but unreliable supply chains and component availability has led to a slower ramp than initially expected.
None of this is particularly good news for ATI (NYSE:ATI) (formerly known as Allegheny Technologies) in the short run, but there is good news in an expanding order book, improving margins, and a multiyear opportunity to leverage strong commercial aerospace demand into cash flows.
ATI shares have risen about 7% since my last update, good enough to beat the market, as well as most other material and component suppliers like Carpenter (CRS), Howmet (HWM), Hexcel (HXL), and Universal Stainless & Alloy (USAP) over that time. Valuation is still relatively appealing, and I think these shares still offer upside.
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Short-Term Noise Shouldn't Drown Out The Attractive Commercial Aerospace Story At ATI
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