What happened

Shares in heavy performance materials and components manufacturer Allegheny Technologies (ATI -0.86%) soared 17.4% in June, according to data from S&P Global Market Intelligence. The move comes after the market took a more positive outlook on the industrial stock's end market prospects.

It's not been an easy year for the company. The company's significant exposure to aerospace, automotive, and oil and gas markets has negatively affected sentiment around the stock. In fact, it would be hard to find three sectors of the industrial economy that have seen their near-term earnings prospects affected more by the COVID-19 pandemic. For reference, the commercial jet engine and airframe segments contributed 43% of Allegheny's sales in the first quarter, with energy contributing 18%.

Rolled steel.

Rolled steel. Image source: Getty Images.

During 2020, automotive plants have been shut down, the price of oil has slumped (negatively affecting capital spending projects), and the commercial aerospace market has been dealt a blow that will take years to recover from.

However, the gradual recovery in the economy since April has encouraged investors to hope for ongoing improvement, and Allegheny stock rose in concert with the aerospace sector. Meanwhile, the gradual recovery in the price of oil to around $40 a barrel has encouraged a bit more confidence in the long-term sales outlook.

So what

It's bad -- it's just not that bad. In other words, it's become clear that some of the apocalyptic scenarios feared by the market aren't likely to come true. That said, Allegheny's key priorities now are to preserve cash and maintain liquidity while management hopes and waits for a recovery in its core end markets. Meanwhile, Allegheny will look to take advantage of demand in smaller end markets such as medical and electronics. A return to service of the Boeing 737 MAX would certainly help matters -- something for Allegheny investors to look out for. 

Now what

Investors need to keep an eye on the outlooks from its commercial aerospace customers such as Raytheon Technologies, General Electric, and Boeing. Without confidence in the end-market prospects for its customers, it will be hard to get excited by the outlook for Allegheny in the next few years.