Key Points
- Recent ratings upgrades by analysts can be a measure of a stock's strong fundamentals for investors looking to shore up their holdings ahead of potential market turbulence.
- Carpenter Technology and Allegheny Technologies are both closely tied to the aerospace and defense industries, which have been flying high thanks to increased demand and spending priorities.
- Booking Holdings has drawn investor attention for its climbing top and bottom lines despite industry headwinds.
Market momentum may be shifting, as investors sensing the threat of a possible AI bubble seek out companies demonstrating strong fundamentals in favor of more speculative plays.
A new set of upgrades from analysts may highlight three names investors could otherwise end up overlooking: Carpenter Technology Corp. (NYSE: CRS), Booking Holdings Inc. (NASDAQ: BKNG), and Allegheny Technologies Inc. (NYSE: ATI). These companies operate in different sectors and spaces, providing investors with a diversified list of names that may be able to withstand any impending market-wide uncertainty.
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Strong Profitability Signs and Long-Term Contracts Boost Carpenter's Profile
Specialty metals manufacturer and fabricator Carpenter focuses on alloys, steels, and other materials used in the aerospace, defense, energy, and medical spaces, among others. The company has carved out a valuable niche among aerospace manufacturing clients, who rely on superalloys that are only produced by Carpenter and a small number of competitors.
While this leaves Carpenter unusually exposed to vulnerabilities in the aerospace and defense industries, when those sections of the market are thriving, Carpenter reaps the benefits. Higher engine production across aerospace and the expectation of increased demand from the defense sector are likely to push Carpenter shares higher—analysts think it's reasonable to watch for more than 20% in upside in the near-term.
Carpenter released earnings info for the first quarter of its fiscal 2026, a period that ended Sep. 30, 2025 and which saw the firm solidly beat predictions for EPS by 30 cents. Adjusted operating income reached record highs thanks to favorable pricing and productivity gains, among other factors. One of the most bullish signals for Carpenter is the company's recent negotiation of multiple long-term agreements with major price increases, which will lock in this fundamental strength for quarters to come. It's only natural, then, that Carpenter saw a flurry of analyst activity after its earnings report, including an upgrade from KeyCorp and multiple raised price targets.
Booking's Quarterly Performance Shines Despite Industry Challenges
Booking, an online travel services firm, saw better-than-anticipated results in its latest quarter as gross bookings and revenue both surged by 14% and 13% year-over-year (YOY), respectively. Adjusted EPS climbed even further, as customers have shown increasing interest in utilizing Booking for connected trips, opting for a single service provider to arrange a variety of travel-related bookings.
The company has also seen some early success with AI integration, which could allow it to minimize cancellations and customer service fees while boosting conversion. This may help Booking to continue to win market share, particularly as rival Airbnb Inc. (NASDAQ: ABNB) has experienced a stock slump this month. To be sure, the market remains fraught, as travel uncertainty remains following the government shutdown and competition continues to advance.
Still, Booking recently saw an upgrade from Wedbush and multiple target boosts, with analysts now seeing about 33% in upside potential.
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ATI's Production Improvements and Increased Demand Lead to Bullish View
Known as ATI, Allegheny Technologies provides materials and components to a list of sectors with some overlap compared to Carpenter above. Like Carpenter, it can also benefit from the ongoing surge in aerospace and defense demand.
A good portion of its engine manufacturing business, however, is focused specifically on commercial aerospace applications, giving it a slightly different focus from some firms that are more defense-leaning.
ATI's revenue climbed by 7% YOY for the latest quarter, not quite meeting analyst expectations, but EPS topped predictions by 10 cents to reach 85 cents overall. Margin gains and production improvements in nickel remelt, powder atomization, and other key processes also bode well for future quarters. Management boosted full-year guidance for both adjusted EBITDA and adjusted free cash flow with this in mind. This was also sufficient for analysts at KeyCorp to boost their rating to Overweight in recent weeks.
Another element setting ATI apart is its focus on returning cash to shareholders, as the firm has employed about half of its nearly $300 million in operating cash flow generated in the first three quarters of the year to stock repurchases. Despite rising by 73% year-to-date (YTD), analysts still see ATI shares climbing into the future, albeit by a more modest 8%.
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