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Key Reasons to Retain Howmet (HWM) Stock in Your Portfolio
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Howmet Aerospace (HWM - Free Report) is poised for growth on the back of recovery in commercial aerospace despite weakness in the defense aerospace market and supply-chain issues in the Forged Wheels segment.
Let’s delve deeper to unearth the factors that are aiding this Zacks Rank #3 (Hold) company.
Business Strength: Strength across the commercial aerospace, commercial transportation, defense aerospace and industrial markets augurs well for Howmet’s growth. Commercial aerospace revenues (up 23% year over year in the second quarter) increased for nine consecutive quarters. Widebody recovery and a strong backlog of commercial aircraft orders and spares growth are expected to drive commercial aerospace revenues in 2023.
Howmet’s Engine products segment (revenues up 26% year over year in the second quarter) is benefiting from growth in commercial aerospace and defense aerospace markets owing to higher build rates and increased spares. Within the Fastening Systems segment (revenues up 19% in the second quarter), widebody recovery is driving commercial aerospace revenues. Strength in defense aerospace and general industrial also bodes well for the segment. The Engineered Structures segment (revenues up 8% in the second quarter) is also buoyed by higher commercial aerospace revenues. Higher volumes are driving Forged Wheels revenues, which rose 7% in the second quarter.
Bullish Guidance: Amid a strong backlog of commercial aircraft orders at both Boeing and Airbus and strength in the defense market, Howmet has raised its 2023 guidance. The company now expects revenues in the range of $6.400-$6.470 billion compared with $6.200-$6.325 billion anticipated earlier. In 2022, the company reported revenues of $5.7 billion. For 2023, adjusted earnings per share are forecasted to be in the band of $1.69-$1.71 compared with $1.65-$1.70 predicted earlier. In 2022, the company reported adjusted earnings of $1.11 per share.
Rewards to Shareholders: Howmet’s measures to reward its shareholders are encouraging. In the first half of 2023, the company paid dividends of $35 million and repurchased shares worth $125 million. The company expects to hike its dividend by 25% to 5 cents per share in the fourth quarter.
Price Performance: Amid the positives, shares of HWM have rallied 40% in a year, outperforming the industry’s 35% increase.
Image Source: Zacks Investment Research
Northbound Estimate Revision: The Zacks Consensus Estimate for Howmet’s 2023 earnings has been revised upward by 1.8% in the past 60 days.
Key Picks
Some better-ranked stocks within the broader Construction sector are as follows:
Fluor has an estimated earnings growth rate of 141.5% for the current year. The stock has gained 35.2% in a year.
Sterling Infrastructure (STRL - Free Report) is also a Zacks #1 Ranked player. The Zacks Consensus Estimate for the company’s 2023 earnings has been revised upward by 16.2% in the past 60 days.
Sterling Infrastructure has an estimated earnings growth rate of 29.4% for the current year. The stock has surged more than 200% in a year.
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Key Reasons to Retain Howmet (HWM) Stock in Your Portfolio
Howmet Aerospace (HWM - Free Report) is poised for growth on the back of recovery in commercial aerospace despite weakness in the defense aerospace market and supply-chain issues in the Forged Wheels segment.
Let’s delve deeper to unearth the factors that are aiding this Zacks Rank #3 (Hold) company.
Business Strength: Strength across the commercial aerospace, commercial transportation, defense aerospace and industrial markets augurs well for Howmet’s growth. Commercial aerospace revenues (up 23% year over year in the second quarter) increased for nine consecutive quarters. Widebody recovery and a strong backlog of commercial aircraft orders and spares growth are expected to drive commercial aerospace revenues in 2023.
Howmet’s Engine products segment (revenues up 26% year over year in the second quarter) is benefiting from growth in commercial aerospace and defense aerospace markets owing to higher build rates and increased spares. Within the Fastening Systems segment (revenues up 19% in the second quarter), widebody recovery is driving commercial aerospace revenues. Strength in defense aerospace and general industrial also bodes well for the segment. The Engineered Structures segment (revenues up 8% in the second quarter) is also buoyed by higher commercial aerospace revenues. Higher volumes are driving Forged Wheels revenues, which rose 7% in the second quarter.
Bullish Guidance: Amid a strong backlog of commercial aircraft orders at both Boeing and Airbus and strength in the defense market, Howmet has raised its 2023 guidance. The company now expects revenues in the range of $6.400-$6.470 billion compared with $6.200-$6.325 billion anticipated earlier. In 2022, the company reported revenues of $5.7 billion. For 2023, adjusted earnings per share are forecasted to be in the band of $1.69-$1.71 compared with $1.65-$1.70 predicted earlier. In 2022, the company reported adjusted earnings of $1.11 per share.
Rewards to Shareholders: Howmet’s measures to reward its shareholders are encouraging. In the first half of 2023, the company paid dividends of $35 million and repurchased shares worth $125 million. The company expects to hike its dividend by 25% to 5 cents per share in the fourth quarter.
Price Performance: Amid the positives, shares of HWM have rallied 40% in a year, outperforming the industry’s 35% increase.
Image Source: Zacks Investment Research
Northbound Estimate Revision: The Zacks Consensus Estimate for Howmet’s 2023 earnings has been revised upward by 1.8% in the past 60 days.
Key Picks
Some better-ranked stocks within the broader Construction sector are as follows:
Fluor (FLR - Free Report) sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for the company’s 2023 earnings has been revised upward by 13.8% in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks.
Fluor has an estimated earnings growth rate of 141.5% for the current year. The stock has gained 35.2% in a year.
Sterling Infrastructure (STRL - Free Report) is also a Zacks #1 Ranked player. The Zacks Consensus Estimate for the company’s 2023 earnings has been revised upward by 16.2% in the past 60 days.
Sterling Infrastructure has an estimated earnings growth rate of 29.4% for the current year. The stock has surged more than 200% in a year.