Intrinsic value of Allegheny Technologies - ATI

Previous Close

$18.48

  Intrinsic Value

$1.68

stock screener

  Rating & Target

str. sell

-91%

  Value-price divergence*

-101%

Previous close

$18.48

 
Intrinsic value

$1.68

 
Up/down potential

-91%

 
Rating

str. sell

 
Value-price divergence*

-101%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of ATI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 2.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -15.73
  14.20
  13.28
  12.45
  11.71
  11.04
  10.43
  9.89
  9.40
  8.96
  8.56
  8.21
  7.89
  7.60
  7.34
  7.10
  6.89
  6.70
  6.53
  6.38
  6.24
  6.12
  6.01
  5.91
  5.82
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
Revenue, $m
  3,135
  3,580
  4,056
  4,561
  5,095
  5,657
  6,247
  6,865
  7,510
  8,183
  8,884
  9,613
  10,371
  11,159
  11,978
  12,829
  13,713
  14,633
  15,589
  16,584
  17,619
  18,697
  19,820
  20,991
  22,211
  23,485
  24,814
  26,203
  27,653
  29,169
  30,753
Variable operating expenses, $m
 
  2,085
  2,354
  2,639
  2,940
  3,258
  3,591
  3,939
  4,304
  4,684
  5,079
  5,427
  5,855
  6,300
  6,762
  7,242
  7,742
  8,261
  8,800
  9,362
  9,946
  10,555
  11,189
  11,850
  12,539
  13,258
  14,008
  14,792
  15,611
  16,466
  17,361
Fixed operating expenses, $m
 
  2,011
  2,061
  2,113
  2,166
  2,220
  2,275
  2,332
  2,391
  2,450
  2,512
  2,574
  2,639
  2,705
  2,772
  2,842
  2,913
  2,985
  3,060
  3,137
  3,215
  3,295
  3,378
  3,462
  3,549
  3,637
  3,728
  3,822
  3,917
  4,015
  4,115
Total operating expenses, $m
  3,747
  4,096
  4,415
  4,752
  5,106
  5,478
  5,866
  6,271
  6,695
  7,134
  7,591
  8,001
  8,494
  9,005
  9,534
  10,084
  10,655
  11,246
  11,860
  12,499
  13,161
  13,850
  14,567
  15,312
  16,088
  16,895
  17,736
  18,614
  19,528
  20,481
  21,476
Operating income, $m
  -612
  -516
  -359
  -191
  -11
  179
  381
  593
  816
  1,049
  1,293
  1,612
  1,878
  2,155
  2,444
  2,745
  3,059
  3,387
  3,729
  4,085
  4,458
  4,847
  5,254
  5,679
  6,124
  6,590
  7,078
  7,589
  8,125
  8,687
  9,277
EBITDA, $m
  -442
  -294
  -116
  75
  278
  493
  721
  960
  1,212
  1,475
  1,749
  2,036
  2,336
  2,648
  2,973
  3,312
  3,665
  4,033
  4,417
  4,818
  5,236
  5,672
  6,129
  6,606
  7,105
  7,627
  8,173
  8,746
  9,346
  9,975
  10,635
Interest expense (income), $m
  127
  133
  172
  214
  259
  307
  356
  409
  464
  521
  580
  643
  707
  775
  844
  917
  993
  1,071
  1,153
  1,237
  1,326
  1,417
  1,513
  1,613
  1,717
  1,825
  1,938
  2,056
  2,179
  2,307
  2,442
Earnings before tax, $m
  -734
  -649
  -532
  -405
  -271
  -127
  24
  184
  352
  528
  712
  969
  1,170
  1,380
  1,599
  1,828
  2,067
  2,316
  2,576
  2,848
  3,132
  3,429
  3,740
  4,066
  4,407
  4,765
  5,140
  5,533
  5,946
  6,380
  6,835
Tax expense, $m
  -107
  0
  0
  0
  0
  0
  7
  50
  95
  143
  192
  262
  316
  373
  432
  494
  558
  625
  696
  769
  846
  926
  1,010
  1,098
  1,190
  1,287
  1,388
  1,494
  1,605
  1,723
  1,845
Net income, $m
  -641
  -649
  -532
  -405
  -271
  -127
  18
  135
  257
  386
  520
  708
  854
  1,008
  1,168
  1,334
  1,509
  1,691
  1,881
  2,079
  2,286
  2,503
  2,731
  2,968
  3,217
  3,478
  3,752
  4,039
  4,341
  4,657
  4,990

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  230
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  5,170
  5,638
  6,387
  7,182
  8,023
  8,908
  9,838
  10,811
  11,827
  12,886
  13,990
  15,138
  16,332
  17,573
  18,863
  20,203
  21,596
  23,044
  24,550
  26,116
  27,747
  29,444
  31,213
  33,056
  34,979
  36,984
  39,078
  41,264
  43,548
  45,935
  48,431
Adjusted assets (=assets-cash), $m
  4,940
  5,638
  6,387
  7,182
  8,023
  8,908
  9,838
  10,811
  11,827
  12,886
  13,990
  15,138
  16,332
  17,573
  18,863
  20,203
  21,596
  23,044
  24,550
  26,116
  27,747
  29,444
  31,213
  33,056
  34,979
  36,984
  39,078
  41,264
  43,548
  45,935
  48,431
Revenue / Adjusted assets
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
Average production assets, $m
  2,867
  3,272
  3,707
  4,168
  4,656
  5,170
  5,710
  6,274
  6,864
  7,479
  8,120
  8,786
  9,479
  10,199
  10,948
  11,726
  12,534
  13,374
  14,248
  15,158
  16,104
  17,089
  18,116
  19,185
  20,301
  21,465
  22,680
  23,949
  25,275
  26,660
  28,109
Working capital, $m
  1,058
  1,067
  1,209
  1,359
  1,518
  1,686
  1,862
  2,046
  2,238
  2,439
  2,647
  2,865
  3,091
  3,325
  3,569
  3,823
  4,087
  4,361
  4,646
  4,942
  5,250
  5,572
  5,906
  6,255
  6,619
  6,999
  7,395
  7,808
  8,241
  8,692
  9,165
Total debt, $m
  1,877
  2,296
  2,858
  3,456
  4,087
  4,752
  5,450
  6,181
  6,944
  7,740
  8,569
  9,431
  10,328
  11,260
  12,228
  13,235
  14,281
  15,368
  16,499
  17,675
  18,900
  20,175
  21,503
  22,887
  24,331
  25,837
  27,409
  29,051
  30,766
  32,559
  34,433
Total liabilities, $m
  3,815
  4,234
  4,796
  5,394
  6,025
  6,690
  7,388
  8,119
  8,882
  9,678
  10,507
  11,369
  12,266
  13,198
  14,166
  15,173
  16,219
  17,306
  18,437
  19,613
  20,838
  22,113
  23,441
  24,825
  26,269
  27,775
  29,347
  30,989
  32,704
  34,497
  36,371
Total equity, $m
  1,355
  1,404
  1,590
  1,788
  1,998
  2,218
  2,450
  2,692
  2,945
  3,209
  3,484
  3,769
  4,067
  4,376
  4,697
  5,031
  5,377
  5,738
  6,113
  6,503
  6,909
  7,332
  7,772
  8,231
  8,710
  9,209
  9,730
  10,275
  10,843
  11,438
  12,059
Total liabilities and equity, $m
  5,170
  5,638
  6,386
  7,182
  8,023
  8,908
  9,838
  10,811
  11,827
  12,887
  13,991
  15,138
  16,333
  17,574
  18,863
  20,204
  21,596
  23,044
  24,550
  26,116
  27,747
  29,445
  31,213
  33,056
  34,979
  36,984
  39,077
  41,264
  43,547
  45,935
  48,430
Debt-to-equity ratio
  1.385
  1.640
  1.800
  1.930
  2.050
  2.140
  2.220
  2.300
  2.360
  2.410
  2.460
  2.500
  2.540
  2.570
  2.600
  2.630
  2.660
  2.680
  2.700
  2.720
  2.740
  2.750
  2.770
  2.780
  2.790
  2.810
  2.820
  2.830
  2.840
  2.850
  2.860
Adjusted equity ratio
  0.228
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -641
  -649
  -532
  -405
  -271
  -127
  18
  135
  257
  386
  520
  708
  854
  1,008
  1,168
  1,334
  1,509
  1,691
  1,881
  2,079
  2,286
  2,503
  2,731
  2,968
  3,217
  3,478
  3,752
  4,039
  4,341
  4,657
  4,990
Depreciation, amort., depletion, $m
  170
  222
  243
  266
  289
  314
  340
  367
  396
  426
  456
  424
  458
  493
  529
  566
  606
  646
  688
  732
  778
  826
  875
  927
  981
  1,037
  1,096
  1,157
  1,221
  1,288
  1,358
Funds from operations, $m
  18
  -427
  -288
  -140
  19
  187
  358
  502
  653
  811
  977
  1,132
  1,312
  1,500
  1,696
  1,901
  2,114
  2,337
  2,569
  2,811
  3,064
  3,329
  3,606
  3,895
  4,198
  4,515
  4,848
  5,196
  5,562
  5,945
  6,348
Change in working capital, $m
  62
  133
  142
  150
  159
  168
  176
  184
  192
  201
  209
  217
  226
  235
  244
  254
  264
  274
  285
  296
  309
  321
  335
  349
  364
  380
  396
  414
  432
  452
  472
Cash from operations, $m
  -44
  -559
  -430
  -290
  -140
  19
  182
  318
  461
  611
  768
  915
  1,086
  1,266
  1,452
  1,647
  1,851
  2,063
  2,284
  2,515
  2,756
  3,008
  3,271
  3,546
  3,834
  4,136
  4,452
  4,783
  5,130
  5,493
  5,875
Maintenance CAPEX, $m
  0
  -138
  -158
  -179
  -201
  -225
  -250
  -276
  -303
  -332
  -361
  -392
  -424
  -458
  -493
  -529
  -566
  -606
  -646
  -688
  -732
  -778
  -826
  -875
  -927
  -981
  -1,037
  -1,096
  -1,157
  -1,221
  -1,288
New CAPEX, $m
  -202
  -406
  -435
  -462
  -488
  -514
  -539
  -565
  -590
  -615
  -641
  -666
  -693
  -720
  -748
  -778
  -808
  -840
  -874
  -909
  -946
  -985
  -1,026
  -1,070
  -1,116
  -1,164
  -1,215
  -1,269
  -1,326
  -1,385
  -1,449
Cash from investing activities, $m
  -200
  -544
  -593
  -641
  -689
  -739
  -789
  -841
  -893
  -947
  -1,002
  -1,058
  -1,117
  -1,178
  -1,241
  -1,307
  -1,374
  -1,446
  -1,520
  -1,597
  -1,678
  -1,763
  -1,852
  -1,945
  -2,043
  -2,145
  -2,252
  -2,365
  -2,483
  -2,606
  -2,737
Free cash flow, $m
  -244
  -1,104
  -1,023
  -931
  -830
  -720
  -607
  -523
  -432
  -336
  -234
  -144
  -31
  87
  211
  341
  476
  617
  764
  917
  1,077
  1,244
  1,419
  1,601
  1,792
  1,991
  2,200
  2,418
  2,647
  2,887
  3,139
Issuance/(repayment) of debt, $m
  388
  524
  562
  597
  631
  665
  698
  731
  763
  796
  829
  862
  897
  932
  969
  1,006
  1,046
  1,087
  1,131
  1,176
  1,224
  1,275
  1,328
  1,384
  1,444
  1,506
  1,572
  1,642
  1,715
  1,793
  1,874
Issuance/(repurchase) of shares, $m
  0
  823
  718
  603
  480
  348
  214
  108
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  350
  1,347
  1,280
  1,200
  1,111
  1,013
  912
  839
  763
  796
  829
  862
  897
  932
  969
  1,006
  1,046
  1,087
  1,131
  1,176
  1,224
  1,275
  1,328
  1,384
  1,444
  1,506
  1,572
  1,642
  1,715
  1,793
  1,874
Total cash flow (excl. dividends), $m
  106
  243
  258
  270
  281
  293
  304
  316
  331
  460
  595
  718
  866
  1,019
  1,180
  1,347
  1,522
  1,704
  1,895
  2,094
  2,302
  2,519
  2,747
  2,986
  3,235
  3,497
  3,772
  4,060
  4,362
  4,680
  5,013
Retained Cash Flow (-), $m
  728
  -823
  -718
  -603
  -480
  -348
  -231
  -242
  -253
  -264
  -275
  -286
  -297
  -309
  -321
  -334
  -347
  -361
  -375
  -390
  -406
  -423
  -440
  -459
  -479
  -499
  -521
  -544
  -569
  -594
  -621
Prev. year cash balance distribution, $m
 
  125
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -455
  -460
  -334
  -198
  -55
  73
  73
  78
  196
  320
  432
  568
  710
  859
  1,013
  1,175
  1,344
  1,520
  1,704
  1,896
  2,097
  2,307
  2,527
  2,757
  2,998
  3,251
  3,516
  3,794
  4,085
  4,392
Discount rate, %
 
  9.90
  10.40
  10.91
  11.46
  12.03
  12.64
  13.27
  13.93
  14.63
  15.36
  16.13
  16.93
  17.78
  18.67
  19.60
  20.58
  21.61
  22.69
  23.83
  25.02
  26.27
  27.58
  28.96
  30.41
  31.93
  33.52
  35.20
  36.96
  38.81
  40.75
PV of cash for distribution, $m
 
  -414
  -378
  -245
  -129
  -31
  36
  31
  27
  57
  77
  84
  87
  85
  78
  69
  59
  48
  38
  29
  22
  16
  11
  7
  5
  3
  2
  1
  1
  0
  0
Current shareholders' claim on cash, %
  100
  68.4
  50.6
  40.1
  33.8
  30.2
  28.3
  27.5
  27.5
  27.5
  27.5
  27.5
  27.5
  27.5
  27.5
  27.5
  27.5
  27.5
  27.5
  27.5
  27.5
  27.5
  27.5
  27.5
  27.5
  27.5
  27.5
  27.5
  27.5
  27.5
  27.5

Allegheny Technologies Incorporated produces and sells specialty materials and components worldwide. The company operates through two segments, High Performance Materials & Components; and Flat-Rolled Products. The High Performance Materials & Components segment provides various high performance materials, including titanium and titanium-based alloys; nickel-and cobalt-based alloys and superalloys; zirconium and related alloys, such as hafnium and niobium, advanced powder alloys, and other specialty materials, in long product forms of ingots, billets, bars, rods, wires, shapes and rectangles, and seamless tubes, plus precision forgings, castings, components, and machined parts. This segment serves aerospace and defense, oil and gas/chemical, hydrocarbon processing, electrical energy, and medical markets. The Flat-Rolled Products segment produces, converts, and distributes stainless steel, nickel-based alloys, specialty alloys, and titanium and titanium-based alloys in various forms, including plate, sheet, engineered strip, and Precision Rolled Strip products, as well as grain-oriented electrical steel. This segment serves oil and gas/chemical and hydrocarbon processing industry, electrical energy, automotive, food processing equipment and appliances, construction and mining, electronics, communication equipment and computers, and aerospace and defense markets. Allegheny Technologies Incorporated was founded in 1960 and is based in Pittsburgh, Pennsylvania.

FINANCIAL RATIOS  of  Allegheny Technologies (ATI)

Valuation Ratios
P/E Ratio -3.1
Price to Sales 0.6
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow -45.8
Price to Free Cash Flow -8.2
Growth Rates
Sales Growth Rate -15.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 39.3%
Cap. Spend. - 3 Yr. Gr. Rate -19.9%
Financial Strength
Quick Ratio 2
Current Ratio 0
LT Debt to Equity 130.8%
Total Debt to Equity 138.5%
Interest Coverage -5
Management Effectiveness
Return On Assets -9.8%
Ret/ On Assets - 3 Yr. Avg. -2%
Return On Total Capital -18.8%
Ret/ On T. Cap. - 3 Yr. Avg. -9.6%
Return On Equity -37.3%
Return On Equity - 3 Yr. Avg. -17.8%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 5.2%
Gross Margin - 3 Yr. Avg. 5.2%
EBITDA Margin -13.9%
EBITDA Margin - 3 Yr. Avg. -3.9%
Operating Margin -19.5%
Oper. Margin - 3 Yr. Avg. -9%
Pre-Tax Margin -23.4%
Pre-Tax Margin - 3 Yr. Avg. -12.1%
Net Profit Margin -20.4%
Net Profit Margin - 3 Yr. Avg. -10.2%
Effective Tax Rate 14.6%
Eff/ Tax Rate - 3 Yr. Avg. -120.7%
Payout Ratio -4.1%

ATI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ATI stock intrinsic value calculation we used $3135 million for the last fiscal year's total revenue generated by Allegheny Technologies. The default revenue input number comes from 2016 income statement of Allegheny Technologies. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ATI stock valuation model: a) initial revenue growth rate of 14.2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 9.9%, whose default value for ATI is calculated based on our internal credit rating of Allegheny Technologies, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Allegheny Technologies.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ATI stock the variable cost ratio is equal to 58.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1962 million in the base year in the intrinsic value calculation for ATI stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 7.5% for Allegheny Technologies.

Corporate tax rate of 27% is the nominal tax rate for Allegheny Technologies. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ATI stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ATI are equal to 91.4%.

Life of production assets of 20.7 years is the average useful life of capital assets used in Allegheny Technologies operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ATI is equal to 29.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1355 million for Allegheny Technologies - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 106.319 million for Allegheny Technologies is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Allegheny Technologies at the current share price and the inputted number of shares is $2.0 billion.

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COMPANY NEWS

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▶ Allegheny Technologies beats Street 1Q forecasts   [07:46AM  Associated Press]
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Stock chart of ATI Financial statements of ATI
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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