ATI · ATI
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a daily close below $165.00
Note written ·
Price against the kill line
11.0% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it (a weekly close, on a weekly line) would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close below $165.00, on record since 10 November 2026. The shares are down 21.0% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close below $165.00, which would take the shares under the $168.34 close of 5 November 2026 and erase the November rebound; or a cut to the $1.190–1.200 billion full-year adjusted EBITDA guide.
Research onlyNot in the portfolio.
Key figures from the filings · Materials
Quarter to 27 September 2026, filed 29 October 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 1,424
- Revenue, change on a year (%)
- +26.5
- Gross margin (%)
- 26.7
- Operating margin (%)
- 19.1
- Free cash flow, four quarters ($M)
- 421
- Net cash, cash less debt ($M)
- −1,415
- Price to earnings (×)
- 44.8
- Enterprise value to sales (×)
- 5.2
All filed numbers
What ATI reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 1,424 | +26.5 | 26.7 | 19.1 |
| first filed | 1,261 | +10.6 | 24.6 | 17.4 |
| first filed | 1,152 | +0.6 | 22.8 | 14.2 |
| first filed | 1,177 | +0.4 | 23.2 | 14.5 |
| first filed | 1,126 | +7.1 | 22.7 | 14.4 |
| first filed | 1,140 | +4.1 | 21.3 | 14.1 |
| Pre-tax income ($M) | 245 |
| Net income ($M) four quarters: 556 | 190 |
| Diluted shares, change on a year (%) against the quarter to 28 September 2025 | −1.5 |
| Operating cash flow ($M) | 730 |
| Capital spending ($M) | 309 |
| Free cash flow ($M) | 421 |
| Cash and short-term investments ($M) | 442 |
| Debt ($M) | 1,858 |
| Net cash, cash less debt ($M) | −1,415 |
| Deferred revenue ($M) +24.8% on a year | 273 |
| Backlog, orders not yet delivered ($M) +19.4% on a year | 4,300 |
| Receivables ($M) | 733 |
| Inventory ($M) | 1,657 |
| Shareholders' equity ($M) | 2,005 |
| Market value ($M) | 24,868 |
| Enterprise value, market value plus net debt ($M) | 26,283 |
| Enterprise value to sales (×) | 5.2 |
| Enterprise value to operating income (×) | 31.8 |
| Price to earnings (×) | 44.8 |
| Price to book value (×) | 12.4 |
| Free-cash-flow yield (%) | 1.7 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 3.5% of shares outstanding sold short, 3.9 days of average trading to cover, −0.2% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $15.7M |
| 12 monthsfrom | $0 | $80.6M |
The thesis
ATI Inc., the titanium and nickel-superalloy supplier to aerospace and defense, is modestly more likely than not to beat the S&P 500 over the next three months. The company raised 2026 guidance for the third time on 29 October 2026 and set 2029 targets on 12 November 2026 well above its 2026 run rate, yet the shares remain below their August levels. The fourth-quarter report decides whether earnings and cash flow keep rising toward those targets.
At the Investor Day on 12 November 2026, ATI targeted 10% to 12% annual compound revenue growth from 2026 through 2029 and an adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) margin in the high-20% to low-30% range, against a low-20% range projected for 2026 (Securities.io). It also targeted about $1.25 billion of adjusted free cash flow in 2029, against a projected 2026 midpoint of $575 million. GuruFocus reported an adjusted EPS target of $10 to $12 by 2029 (GuruFocus).
The shares closed at $190.16 on 12 November 2026, up from $187.53 on 11 November 2026 and $168.34 on 5 November 2026. They sit 16.8% below the price of three months earlier (adjusted daily closes) and 21.9% below the 52-week intraday high of $243.57 set on 12 August 2026. The market has priced in doubt about cash conversion: third-quarter free cash flow fell to $79.6 million from $199.7 million a year earlier, and the shares fell after the beat and raise.
This is a view. It fails if fourth-quarter results or 2027 guidance show adjusted EBITDA or free cash flow falling short of the paths the company laid out.
Bullish and bearish views on ATI Inc.
The bull case on ATI Inc. (ATI), in brief: third-quarter results beat guidance. The bear case: the price fell after a beat and raise.
Bull case
- Third-quarter results beat guidance. ATI reported sales of $1,423.7 million, up 26% year on year, on 29 October 2026. Adjusted EBITDA was $327.9 million, a 23.0% margin and $13 million above the top of guidance, and adjusted EPS was $1.46 against $0.85 a year earlier (ATI results).
- Guidance rose again. Full-year adjusted EBITDA guidance moved to $1.190–1.200 billion from $1.135–1.185 billion, and adjusted EPS to $5.17–5.23 from $4.90–5.18, per the 29 October 2026 release. Fourth-quarter guidance is adjusted EBITDA of $345–355 million and adjusted EPS of $1.51–1.57.
- Multi-year targets raise the ceiling. The 12 November 2026 Investor Day set a 2029 free cash flow target of about $1.25 billion and a goal of returning more than 75% of annual adjusted free cash flow to shareholders. Free cash flow conversion is targeted above 90% of net income.
- New capacity adds revenue. ATI said nickel powder work at Bakers, North Carolina, adds about $200 million of revenue by late 2028 and a zirconium sponge expansion at Millersburg, Oregon, adds about $100 million by early 2028. With earlier titanium and nickel projects, the program adds nearly $1 billion of revenue by 2029 (Securities.io, 12 November 2026).
- Engine demand lifts margin. Advanced Alloys & Solutions segment EBITDA was $181.3 million at a 25.8% margin in the third quarter, up from 17.3% a year earlier.
- Analyst targets sit above the price. Deutsche Bank raised its target to $230 from $228 and kept its Buy rating on 11 November 2026. Citigroup initiated at Buy with a $229 target on 5 November 2026, and BTIG kept Buy with a $250 target on 30 October 2026.
- The company is repurchasing shares. ATI bought back $70.0 million of stock at an average $199.62 in the third quarter, with $425 million of authorization remaining (29 October 2026 release).
Bear case
- The price fell after a beat and raise. The shares closed at $179.09 on 4 November 2026 and $168.34 on 5 November 2026, days after the 29 October 2026 report. The market was not paying for this year's earnings.
- Cash flow fell sharply. Third-quarter adjusted free cash flow was $79.6 million against $199.7 million in the third quarter of 2025. Year-to-date free cash flow is $222.8 million against an unchanged full-year guide of $550–600 million.
- Spending steps up before the payoff. ATI said capital spending rises to 7% of sales in 2027 and 2028 from 6% in 2026, returning to 6% in 2029 (Securities.io, 12 November 2026). The $1.25 billion free cash flow target depends on 2029, three years out.
- One segment's margin slipped. High Performance Materials & Components margin was 23.2% in the third quarter, down from 24.2% a year earlier. ATI attributed it to higher manufacturing costs, including the ramp of a new nickel-based superalloy.
- Insiders sold into the decline. SEC Form 4 filings show Senior Vice President Timothy J. Harris sold 9,000 shares at $191.82 on 21 September 2026 under a Rule 10b5-1 plan. Chief Executive Kimberly Fields sold 24,845 shares at an average $231.19 on 17 August 2026, also under a plan.
Price setup
The last close of $190.16 on 12 November 2026 sits above the 50-day average of $185.39 and the 200-day average of $175.9, both from adjusted daily closes. The 52-week intraday high is $243.57 on 12 August 2026, and the 52-week closing low is $94.80 on 20 November 2025.
The November range runs from the $168.34 close on 5 November 2026 to the latest close. Closes rose through $175.79 on 6 November 2026, $184.85 on 9 November 2026, $182.72 on 10 November 2026 and $187.53 on 11 November 2026, then $190.16 on the Investor Day session. The 3-month change is −16.8%, measured against the $228.48 close of 14 August 2026.
ATI's third-quarter repurchases averaged $199.62, above the latest close.
Catalysts ahead
- ~17 February 2027 (est.): ATI fourth-quarter and full-year 2026 results, with 2027 guidance (date unconfirmed). Shows whether adjusted EBITDA reaches the $345–355 million fourth-quarter guide and whether 2027 guidance and free cash flow track the 2029 targets set on 12 November 2026.
What would change the view
A daily close below $165.00, which would take the shares under the $168.34 close of 5 November 2026 and erase the November rebound; or a cut to the $1.190–1.200 billion full-year adjusted EBITDA guide.
The risks this note tracks, each with what would confirm it:
- Earnings strength stays disconnected from the share price, as it did after the 29 October 2026 report. Confirmed by: shares falling back toward the $168.34 close of 5 November 2026 despite the 2029 targets set on 12 November 2026.
- Cash conversion lags earnings. Confirmed by: full-year adjusted free cash flow tracking below the $550–600 million guide, after $222.8 million year to date through the third quarter.
- Higher capital spending delays the cash payoff. Confirmed by: 2027 guidance showing free cash flow flat or lower than 2026 while capex runs at the 7% of sales ATI outlined on 12 November 2026.
- Sell-side targets compress toward the share price. Confirmed by: further target cuts after BTIG's reduction to $250 on 30 October 2026, pulling Citigroup's $229 and Deutsche Bank's $230 down.
- Segment margin pressure from the new superalloy ramp persists. Confirmed by: high Performance Materials & Components margin staying below the 24.2% of a year earlier at the fourth-quarter report.
What it trades with
ATI trades with commercial aerospace suppliers whose volumes depend on jet-engine and airframe build rates, and with specialty-metal peers. Carpenter Technology is the closest peer; its fiscal year ends 30 June, so its quarters need aligning with ATI's before comparison. Titanium and nickel prices and large aerospace customers' production schedules feed the same demand signal. The Investor Day reaction on 12 November 2026 reflects ATI's own targets more than the broad market.
The evidence, claim by claim (8)
- ATI Q3 2026 sales were $1,423.7M (+26% YoY); adjusted EBITDA $327.9M (23.0% margin), $13M above the top of guidance; adjusted EPS $1.46 vs $0.85 a year earlier. ATI third-quarter 2026 results release · as of
- ATI raised full-year 2026 adjusted EBITDA guidance to $1.190–1.200B from $1.135–1.185B and adjusted EPS to $5.17–5.23 from $4.90–5.18; free cash flow guide unchanged at $550–600M. ATI third-quarter 2026 results release · as of
- Q4 2026 guidance: adjusted EBITDA $345–355M and adjusted EPS $1.51–1.57. ATI third-quarter 2026 results release · as of
- Q3 adjusted free cash flow was $79.6M versus $199.7M in Q3 2025; ATI repurchased $70.0M of shares at an average $199.62, with $425M authorization remaining. ATI third-quarter 2026 results release · as of
- Investor Day targets: 10%–12% annual compound revenue growth 2026–2029; 2029 adjusted EBITDA margin in the high-20% to low-30% range versus low-20% projected for 2026; about $1.25B adjusted free cash flow in 2029 versus a $575M 2026 midpoint. Securities.io report on ATI Investor Day, 12 November 2026 · as of
- Investor Day capital plan: capex 7% of sales in 2027 and 2028 (6% in 2026); Bakers and Millersburg projects add about $300M of revenue; the program adds nearly $1B of revenue by 2029; more than 75% of free cash flow to be returned to shareholders. Securities.io report on ATI Investor Day, 12 November 2026 · as of
- Deutsche Bank raised its ATI price target to $230 from $228 and kept its Buy rating. Company-news headline, 11 November 2026 · as of
- Advanced Alloys & Solutions segment EBITDA was $181.3M at a 25.8% margin (17.3% a year earlier); High Performance Materials & Components margin was 23.2% (24.2% a year earlier). ATI third-quarter 2026 results release · as of
Sources
- ATI Targets $1.25 Billion Adjusted Free Cash Flow With New Capacity · securities.io ·
- ATI Inc (ATI) Projects Strong Sales Growth, Shares Rise Amid Investor Day Update · gurufocus.com ·
- ATI announces third quarter 2026 results · finviz.com
- MarketBeat ·
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