Why RTI International Metals Inc. Could Pop 40%

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of RTI International Metals  (NYSE: RTI  ) surged 6% today after J.P. Morgan upgraded the titanium products producer from neutral to overweight.

So what: Along with the upgrade, analyst Michael Gambardella raised his price target to $34 (from $32), representing about 40% worth of upside to yesterday's close. So while momentum traders might be turned off by RTI's sharp year-to-date pullback, Gambardella's call could reflect a sense on Wall Street that industry tailwinds give the company plenty of cause to rebound.

Now what: According to J.P. Morgan, RTI's risk/reward trade-off remains rather attractive at this point. "RTI commands a unique and increasingly valuable position as the sole North American supplier of titanium mill products for Airbus with an estimated 30-35% market share," said Gambardella. "Based on forecasts from J.P. Morgan's Aerospace & Defense team as well as recent commentary and test flight results from Airbus, we expect higher A350 XWB build rates will help drive RTI's 2015 earnings ahead of expectations; our updated estimates are 19% higher than consensus."

When you couple that upbeat outlook with RTI's beaten-down stock price -- still off 30% from its 52-week high even with today's rally -- it's tough to disagree with J.P. Morgan's bullishness.

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