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Howmet (HWM) Up 37.4% in a Year: Will the Momentum Continue?
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Howmet Aerospace Inc. (HWM - Free Report) appears in good shape, with its shares rallying more than 37% in a year, outperforming the industry’s 17.3% increase.
What’s Aiding HWM?
Howmet’s Engine Products segment is benefiting from growth in the commercial aerospace, defense aerospace, oil and gas, and industrial gas turbine markets. Within the Fastening Systems segment, the commercial aerospace market, including emerging wide body recovery, and the commercial transportation market bode well for the segment.
The Engineered Structures segment is buoyed by growth in the commercial aerospace market, driven by Russian titanium share gains and emerging wide-body recovery. Growth in the commercial transportation market is driving Forged Wheels’ revenues.
Image Source: Zacks Investment Research
Given the 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 to be in the range of $6.530-$6.560 billion compared with $6.400-$6.470 billion anticipated earlier. In 2022, the company reported revenues of $5.7 billion.
HWM anticipates adjusted earnings per share to be in the band of $1.76-$1.78 compared with earnings of $1.69-$1.71 per share predicted earlier. In 2022, the company reported adjusted earnings of $1.11 per share.
Will the Uptrend in Shares Last?
Though the company is facing challenges due to supply-chain issues and the increasing costs of sales, strength across the commercial aerospace, defense aerospace, commercial transportation, and industrial and other markets augurs well for Howmet’s growth. Growth across all three aerospace segments is aiding the commercial aerospace market. Also, robust demand for new, more fuel-efficient aircraft, as well as increased spares demand, is expected to drive commercial aerospace revenues in 2023.
Zacks Rank & Other Stocks to Consider
Howmet currently carries a Zacks Rank #2 (Buy). Some other top-ranked companies are discussed below:
GGG’s earnings surprise in the last four quarters was 7.2%, on average. In the past 60 days, estimates for Graco’s 2023 earnings have increased 1.7%. The stock has gained 9.1% in the past year.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently carries a Zacks Rank of 2 and a trailing four-quarter earnings surprise of 13.9%, on average.
AIT’s earnings estimates have increased 1.9% for fiscal 2024 (ending June 2024) in the past 60 days. Shares of Applied Industrial have risen 24.1% in the past year.
A. O. Smith Corporation (AOS - Free Report) currently carries a Zacks Rank of 2. The company delivered a trailing four-quarter earnings surprise of approximately 14%, on average.
In the past 60 days, estimates for A. O. Smith’s earnings have increased 4.5% for 2023. The stock has soared 21.5% in the past year.
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Howmet (HWM) Up 37.4% in a Year: Will the Momentum Continue?
Howmet Aerospace Inc. (HWM - Free Report) appears in good shape, with its shares rallying more than 37% in a year, outperforming the industry’s 17.3% increase.
What’s Aiding HWM?
Howmet’s Engine Products segment is benefiting from growth in the commercial aerospace, defense aerospace, oil and gas, and industrial gas turbine markets. Within the Fastening Systems segment, the commercial aerospace market, including emerging wide body recovery, and the commercial transportation market bode well for the segment.
The Engineered Structures segment is buoyed by growth in the commercial aerospace market, driven by Russian titanium share gains and emerging wide-body recovery. Growth in the commercial transportation market is driving Forged Wheels’ revenues.
Image Source: Zacks Investment Research
Given the 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 to be in the range of $6.530-$6.560 billion compared with $6.400-$6.470 billion anticipated earlier. In 2022, the company reported revenues of $5.7 billion.
HWM anticipates adjusted earnings per share to be in the band of $1.76-$1.78 compared with earnings of $1.69-$1.71 per share predicted earlier. In 2022, the company reported adjusted earnings of $1.11 per share.
Will the Uptrend in Shares Last?
Though the company is facing challenges due to supply-chain issues and the increasing costs of sales, strength across the commercial aerospace, defense aerospace, commercial transportation, and industrial and other markets augurs well for Howmet’s growth. Growth across all three aerospace segments is aiding the commercial aerospace market. Also, robust demand for new, more fuel-efficient aircraft, as well as increased spares demand, is expected to drive commercial aerospace revenues in 2023.
Zacks Rank & Other Stocks to Consider
Howmet currently carries a Zacks Rank #2 (Buy). Some other top-ranked companies are discussed below:
Graco Inc. (GGG - Free Report) presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
GGG’s earnings surprise in the last four quarters was 7.2%, on average. In the past 60 days, estimates for Graco’s 2023 earnings have increased 1.7%. The stock has gained 9.1% in the past year.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently carries a Zacks Rank of 2 and a trailing four-quarter earnings surprise of 13.9%, on average.
AIT’s earnings estimates have increased 1.9% for fiscal 2024 (ending June 2024) in the past 60 days. Shares of Applied Industrial have risen 24.1% in the past year.
A. O. Smith Corporation (AOS - Free Report) currently carries a Zacks Rank of 2. The company delivered a trailing four-quarter earnings surprise of approximately 14%, on average.
In the past 60 days, estimates for A. O. Smith’s earnings have increased 4.5% for 2023. The stock has soared 21.5% in the past year.