Allegheny and Carpenter Are Undervalued
Near-term headwinds hide attractive aerospace growth prospects.
We contend that the near-term headwinds facing Allegheny Technologies (ATI) and Carpenter Technology (CRS) obscure the attractive long-term growth prospects associated with the companies' exposure to the aerospace end market.
Allegheny and Carpenter are currently in 5-star territory, trading at a steep discount to our fair value estimates on an uncertainty-adjusted basis. We assign a $27 fair value estimate to Allegheny and a $55 fair value estimate to Carpenter, as we expect that the challenges currently facing each company will gradually dissipate, clearing the way for profitable long-term growth.
Andrew Lane does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.