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Howmet Rallies 87.7% in a Year: Should You Buy the Stock or Wait?
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Key Takeaways
HWM's shares surged 87.7% in a year, outpacing peers and trading near their 52-week high.
Aerospace revenues rose 8% in Q2 2025, while defense sales jumped 21% on strong F-35 engine orders.
Weak transportation demand and high input costs weigh on HWM, now trading at a rich 46.53X P/E.
Howmet Aerospace Inc.’s (HWM - Free Report) investors have been witnessing impressive gains from the stock of late. Shares of the advanced engineered solutions provider for the aerospace and transportation industries have surged 87.7% in the past year, outpacing the S&P 500 composite and industry’s growth of 18.4% and 22.6%, respectively. The company has also outperformed other industry players like L3Harris Technologies, Inc. (LHX - Free Report) and Textron Inc. (TXT - Free Report) , which have returned 26.6% and lost 0.2% respectively, over the said time frame.
HWM Outperforms the Industry, S&P 500 & Peers
Image Source: Zacks Investment Research
Closing at $191.65 on Wednesday, the stock is trading close to its 52-week high of $198.48 but significantly higher than its 52-week low of $98.83. Also, the stock is trading above both its 50-day and 200-day moving averages, indicating solid upward momentum and price stability. This reflects a positive market sentiment and confidence in the company's financial health and long-term prospects.
HWM Shares’ 50-Day and 200-Day SMA
Image Source: Zacks Investment Research
What’s Behind HWM Stock’s Momentum?
Persistent strength in Howmet’s commercial aerospace market continues to play an important role in its overall growth. With growing passenger traffic in the global aviation market, wide-body aircraft demand has picked up, leading to an increase in OEM spending. This has consistently improved demand for the aircraft parts and products that the company provides.
Revenues from the commercial aerospace market increased 8% year over year in the second quarter of 2025, constituting 52% of its business. Also, in the first quarter, revenues from the market increased 9% year over year. The sustained strength was attributed to new, more fuel-efficient aircraft with reduced carbon emissions and increased spare demand for engines. The Boeing Company (BA - Free Report) is also anticipated to witness a gradual production recovery, particularly in the Boeing 737 MAX aircraft, which is likely to boost demand for HWM’s products in the market.
The defense side of the aerospace market has also been witnessing positive momentum, supported by steady government support. Robust orders for engine spares for the F-35 program and other legacy fighters have been driving HWM’s results. In the second quarter, revenues from the defense aerospace market surged 21% year over year, constituting 17% of the company’s revenues. Also, in the first quarter, revenues from this market grew 19% year over year.
Howmet’s commitment to rewarding its shareholders through dividends and repurchases is encouraging. The company paid dividends of $83 million and repurchased shares worth $300 million in the first six months of 2025. In August 2025, it hiked its quarterly dividend by 20% to 12 cents per share, marking its second dividend hike in 2025.
Also, in July 2024, HWM’s board approved an increase in the share repurchase program by $2 billion to $2.487 billion of its common stock. Exiting the second quarter, HWM’s total share repurchase authorization available was $1.8 billion.
Near-Term Headwinds
Howmet has been witnessing persistent weakness in the commercial transportation market. In second-quarter 2025, revenues from the commercial transportation market declined 4% on a year-over-year basis, following a 14% decline in the first quarter. Demand in the commercial transportation markets served by the Forged Wheels segment is expected to remain soft till the second half of the year due to lower OEM builds.
HWM has been dealing with the adverse impacts of high input costs and operating expenses. In 2024, the cost of goods sold jumped 7.3% year over year to $5.1 billion due to increasing input costs. The trend continued in the first six months of 2025, with the cost of goods sold increasing 3% to $2.66 billion.
Valuation Remains an Overhang
Howmet is trading at a forward 12-month price-to-earnings (P/E) ratio of 46.53X, much higher than the industry average of 29.47X. This elevated valuation could make the stock vulnerable to further pullbacks if market sentiment sours.
In comparison with HWM’s valuation, its peers, L3Harris Technologies and Textron, are trading cheaper. Notably, L3Harris Technologies and Textron are currently trading at 25.77X and 13.06X, respectively.
Image Source: Zacks Investment Research
Earnings Estimate Revision
Earnings estimates for HWM have remained stable over the past 60 days. The Zacks Consensus Estimate for 2025 earnings is pegged at $3.57 per share, indicating year-over-year growth of 32.7%. The consensus mark for 2026 earnings is pinned at $4.28 per share, suggesting year-over-year growth of 19.8%.
Image Source: Zacks Investment Research
Should You Invest in HWM Right Now?
Despite Howmet’s several upsides and shareholder-friendly policies, the near-term challenges, such as weakness in the commercial transportation market and premium valuation, are limiting this Zacks Rank #3 (Hold) company’s near-term prospects. While current shareholders should hold their positions, new investors should wait for the stock to retract some of its recent gains and provide a better entry point.
Image: Bigstock
Howmet Rallies 87.7% in a Year: Should You Buy the Stock or Wait?
Key Takeaways
Howmet Aerospace Inc.’s (HWM - Free Report) investors have been witnessing impressive gains from the stock of late. Shares of the advanced engineered solutions provider for the aerospace and transportation industries have surged 87.7% in the past year, outpacing the S&P 500 composite and industry’s growth of 18.4% and 22.6%, respectively. The company has also outperformed other industry players like L3Harris Technologies, Inc. (LHX - Free Report) and Textron Inc. (TXT - Free Report) , which have returned 26.6% and lost 0.2% respectively, over the said time frame.
HWM Outperforms the Industry, S&P 500 & Peers
Image Source: Zacks Investment Research
Closing at $191.65 on Wednesday, the stock is trading close to its 52-week high of $198.48 but significantly higher than its 52-week low of $98.83. Also, the stock is trading above both its 50-day and 200-day moving averages, indicating solid upward momentum and price stability. This reflects a positive market sentiment and confidence in the company's financial health and long-term prospects.
HWM Shares’ 50-Day and 200-Day SMA
Image Source: Zacks Investment Research
What’s Behind HWM Stock’s Momentum?
Persistent strength in Howmet’s commercial aerospace market continues to play an important role in its overall growth. With growing passenger traffic in the global aviation market, wide-body aircraft demand has picked up, leading to an increase in OEM spending. This has consistently improved demand for the aircraft parts and products that the company provides.
Revenues from the commercial aerospace market increased 8% year over year in the second quarter of 2025, constituting 52% of its business. Also, in the first quarter, revenues from the market increased 9% year over year. The sustained strength was attributed to new, more fuel-efficient aircraft with reduced carbon emissions and increased spare demand for engines. The Boeing Company (BA - Free Report) is also anticipated to witness a gradual production recovery, particularly in the Boeing 737 MAX aircraft, which is likely to boost demand for HWM’s products in the market.
The defense side of the aerospace market has also been witnessing positive momentum, supported by steady government support. Robust orders for engine spares for the F-35 program and other legacy fighters have been driving HWM’s results. In the second quarter, revenues from the defense aerospace market surged 21% year over year, constituting 17% of the company’s revenues. Also, in the first quarter, revenues from this market grew 19% year over year.
Howmet’s commitment to rewarding its shareholders through dividends and repurchases is encouraging. The company paid dividends of $83 million and repurchased shares worth $300 million in the first six months of 2025. In August 2025, it hiked its quarterly dividend by 20% to 12 cents per share, marking its second dividend hike in 2025.
Also, in July 2024, HWM’s board approved an increase in the share repurchase program by $2 billion to $2.487 billion of its common stock. Exiting the second quarter, HWM’s total share repurchase authorization available was $1.8 billion.
Near-Term Headwinds
Howmet has been witnessing persistent weakness in the commercial transportation market. In second-quarter 2025, revenues from the commercial transportation market declined 4% on a year-over-year basis, following a 14% decline in the first quarter. Demand in the commercial transportation markets served by the Forged Wheels segment is expected to remain soft till the second half of the year due to lower OEM builds.
HWM has been dealing with the adverse impacts of high input costs and operating expenses. In 2024, the cost of goods sold jumped 7.3% year over year to $5.1 billion due to increasing input costs. The trend continued in the first six months of 2025, with the cost of goods sold increasing 3% to $2.66 billion.
Valuation Remains an Overhang
Howmet is trading at a forward 12-month price-to-earnings (P/E) ratio of 46.53X, much higher than the industry average of 29.47X. This elevated valuation could make the stock vulnerable to further pullbacks if market sentiment sours.
In comparison with HWM’s valuation, its peers, L3Harris Technologies and Textron, are trading cheaper. Notably, L3Harris Technologies and Textron are currently trading at 25.77X and 13.06X, respectively.
Image Source: Zacks Investment Research
Earnings Estimate Revision
Earnings estimates for HWM have remained stable over the past 60 days. The Zacks Consensus Estimate for 2025 earnings is pegged at $3.57 per share, indicating year-over-year growth of 32.7%. The consensus mark for 2026 earnings is pinned at $4.28 per share, suggesting year-over-year growth of 19.8%.
Image Source: Zacks Investment Research
Should You Invest in HWM Right Now?
Despite Howmet’s several upsides and shareholder-friendly policies, the near-term challenges, such as weakness in the commercial transportation market and premium valuation, are limiting this Zacks Rank #3 (Hold) company’s near-term prospects. While current shareholders should hold their positions, new investors should wait for the stock to retract some of its recent gains and provide a better entry point.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.