ATI Strong 2Q26 on Continued Momentum in Aerospace & Defense, Raised FY26 Guidance

研报英文原文证据摘录

J P M O R G A N

North America Credit Research

06 August 2026

Neutral

ATI

Strong 2Q26 on Continued Momentum in Aerospace &

Defense, Raised FY26 Guidance

Table 1: ATI 2Q26 Earnings Review

$ millions

Revenues

Gross Profit

% margin

Adjusted EBITDA

% margin

LTM Adj EBITDA

Cash

Total Debt

Net Debt

Gross Leverage

Net Leverage

2Q26

1,261.1

309.8

24.6%

284.4

22.6%

973.1

783.0

2,192.0

1,409.0

2.3x

1.4x

1Q26

1,151.5

262.9

22.8%

231.7

20.1%

896.4

401.7

1,838.8

1,437.1

2.1x

1.6x

q/q

9.5%

17.8%

180 bp

22.7%

250 bp

2Q25

1,140.4

242.5

21.3%

207.7

18.2%

797.8

319.6

1,902.9

1,583.3

2.4x

2.0x

y/y

10.6%

27.8%

330 bp

36.9%

440 bp

Source: Company Reports

Earnings: ATI reported strong 2Q26 results. Revenues increased 11% y/y to

$1.26bn, driven by a 13% increase in aerospace & defense. Adjusted EBITDA

increased 37% y/y to $284m (vs $251m street est) as margins improved 440bp y/y

to 22.6%. Demand for ATI’s unique aerospace & defense materials continues to

outpace available supply driving pricing higher. The company’s net debt position

was moderately lower q/q and leverage was 1.4x at the end of June, compared to

1.6x at the end of March.

Outlook: ATI raised its FY26 guidance on the back of continued momentum

from a strong Q2. ATI now expects FY26 adjusted EBITDA to be $1.135bn$1.185bn (compared to previous guidance of $1.01bn to $1.06bn). FY26 Adjusted

FCF is now expected to be in the range of $550m to $600m (compared to previous

guidance of $465m to $525m). For 3Q26, ATI expects adjusted EBITDA to be in

the range of $305m to $315m.

Relative Value: We remain Neutral ATI credit. The implied EBITDA run-rate

from the strong Q2 print and Q3 guide positions ATI to exit the year generating

~$1.2bn in annualized EBITDA on the back of continued demand strength for

differentiated product. Similar to the ascension we have seen in CRS as A&D

fundamentals improve and benefit suppliers into the end market, we expect

continued de-levering at ATI on EBITDA growth but believe valuation

appropriately reflects this trajectory. Risks to the rating: end market demand

uncertainty, capital allocation priorities, M&A.