The article explains the Zacks Rank, a proprietary stock-rating model that uses earnings estimate revisions to help investors build winning portfolios. The system classifies stocks into five categories from 'Strong Buy' to 'Strong Sell' based on four factors: analyst agreement, magnitude of estimate changes, upside potential, and earnings surprises. Historically, a portfolio of Zacks Rank #1 stocks has beaten the market in 26 of the last 32 years with average annual returns of +23.82%.

Zacks highlights three Rank #1 stocks with strong growth potential: ATI Inc., a specialty materials company with a PEG ratio of 1.14; KE Holdings Inc., a Chinese housing services company with a PEG ratio of 0.49 and 22.5% earnings estimate increase; and Valero Energy Corporation, a transportation fuels company with a PEG ratio of 0.29 and 27.5% earnings estimate increase.

ATI, a steel and specialty metals manufacturer in the aerospace-defense sector, is highlighted as a stock likely to beat upcoming earnings estimates. The company has a track record of surpassing consensus estimates by an average of 16.53% over the last two quarters, with a positive Earnings ESP of +1.09% and a Zacks Rank #1 (Strong Buy) rating. The combination of these metrics historically produces positive surprises approximately 70% of the time, with the next earnings report expected on October 29, 2026.

The article explains how to identify stocks likely to beat earnings expectations using Zacks' Earnings ESP (Expected Surprise Prediction) filter, which compares the most accurate analyst estimates to consensus estimates. It highlights two aerospace stocks with positive ESP metrics: ATI with a Strong Buy rating and +1.09% ESP ahead of October 29 earnings, and Woodward with a Buy rating and +0.87% ESP ahead of November 23 earnings, suggesting both may deliver positive earnings surprises.

The global shape memory alloys market is projected to grow from USD 17.14 billion in 2025 to USD 31.97 billion by 2031, driven by demand in medical devices, aerospace, electric vehicles, and consumer electronics. Nitinol dominates the market due to its superior biocompatibility and performance. Key growth drivers include minimally invasive medical procedures, aerospace weight reduction, EV thermal management, and smartphone actuators. Major consolidation activity and capacity expansions are reshaping the competitive landscape.

ATI (Allegheny Technologies), a steel and specialty metals maker, closed at $187.84 with a Zacks Rank #1 Strong Buy rating. The company is expected to report earnings on October 29, 2026, with projected EPS of $1.35 (up 58.82% YoY) and revenue of $1.33 billion (up 17.87% YoY). ATI trades at a Forward P/E of 37.15, above its industry average, but maintains a favorable PEG ratio of 1.15.

Zacks highlights three Rank #1 stocks with strong growth potential: ATI Inc., a specialty materials company with a PEG ratio of 1.14; KE Holdings Inc., a Chinese housing services company with a PEG ratio of 0.49 and 22.5% earnings estimate increase; and Valero Energy Corporation, a transportation fuels company with a PEG ratio of 0.28 and 26.3% earnings estimate increase.

ATI Inc. reported first-half 2026 adjusted free cash flow of $143.2 million and raised its full-year 2026 forecast to $550-$600 million from $465-$525 million, driven by stronger operating performance and healthy aerospace and defense demand. The company returned $470 million to shareholders through buybacks in 2025 with $495 million remaining in authorization. Peers Carpenter Technology and Howmet Aerospace also reported strong free cash flow generation.

Three stocks with Zacks Rank #1 buy ratings are highlighted for investors: ATI Inc. (specialty materials), KE Holdings Inc. (Chinese housing services), and Valero Energy Corporation (transportation fuels). All three have shown positive earnings estimate revisions over the last 60 days and favorable PEG ratios relative to their industries.

Zacks recommends three aerospace-defense equipment stocks with strong growth potential. HEICO Corp. (Rank #1) benefits from sustained demand for aftermarket parts and recent acquisitions, with 33.6% upside potential. ATI Inc. (Rank #1) is driven by strong aerospace and defense demand with record backlog and 29.2% upside. Teledyne Technologies (Rank #2) is supported by rising global defense spending and a $5 billion backlog with 25.2% upside potential.

ATI has gained 64.9% year-to-date, significantly outperforming the Aerospace sector which has declined 14.8%. The stock holds a Zacks Rank #1 (Strong Buy) with analyst consensus estimates for full-year earnings rising 14.3% over the past three months. Lockheed Martin, another aerospace stock, has shown more modest performance with a 3.2% year-to-date return and Zacks Rank #2 (Buy).

Zacks highlights three stocks with Rank #1 (Strong Buy) ratings and strong growth potential: ATI Inc., a specialty materials company with 9.7% earnings estimate increase; KE Holdings Inc., a Chinese housing services company with 22.5% earnings estimate increase; and Valero Energy Corporation, a transportation fuels company with 22.8% earnings estimate increase and an A Growth Score.