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Howmet Trades Near 52-Week High: Should You Buy the Stock or Wait?
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Key Takeaways
HWM shares are near record highs, up over 92% year over year on strong aerospace market momentum.
Commercial and defense aerospace demand lifted revenues, led by engine spares and aircraft backlogs.
Elevated valuation and weakness in commercial transportation limit near-term upside for Howmet.
Howmet Aerospace Inc. (HWM - Free Report) has been on a great run on the bourses lately, as the stock was hovering at more than $211 per share in the last three trading sessions. Shares of the advanced engineered solutions provider for the aerospace and transportation industries closed at $214.69 on Tuesday, close to its 52-week high of $216.38.
Over the past year, the stock has surged 92.3%, outpacing the S&P 500 composite and the industry’s growth of 19% and 34.7%, respectively. The company has also outperformed other industry players like RTX Corporation (RTX - Free Report) and General Dynamics Corporation (GD - Free Report) , which have returned 65.9% and 39%, respectively, over the said time frame.
HWM Outperforms Industry & the S&P 500
Image Source: Zacks Investment Research
The stock is also 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 Trade Above 50-Day and 200-Day SMAs
Image Source: Zacks Investment Research
Factors Favoring the Company
The strongest driver of Howmet’s business at the moment is the commercial aerospace market. The strength in air travel continues, with wide-body aircraft demand also picking up, supporting continued OEM spending. Pickup in air travel has been positive for the company as the increased usage of aircraft spurs spending on parts and products that the company provides. Solid demand for air travel is also encouraging airlines to purchase more aircraft, which is again driving their sales.
In the third quarter of 2025, revenues from the commercial aerospace market increased 15% year over year, constituting 53% of the company’s business. Also, in the first and second quarters, revenues from the market increased 9% and 8% year over year, respectively. The sustained strength was attributed to increasing demand for engine spares and a record backlog for new, more fuel-efficient aircraft with reduced carbon emissions. Also, healthy build rates at Airbus for A320 and A350 aircraft, along with an expected production recovery in the Boeing 737 MAX aircraft, hold promise for HWM’s spare engine demand.
Expanding the defense budget remains another growth catalyst for Howmet. The defense aerospace industry has also been witnessing positive momentum, cushioned by steady government support. HWM has been witnessing robust orders for engine spares for the F-35 program and spares for legacy fighters like the F-15 and the F-16. In the third quarter, revenues from the defense aerospace market surged 24% year over year, constituting 17% of the company’s revenues.
It's worth noting that in July 2025, the House of Representatives passed the fiscal year 2026 Defense Appropriations Act, providing a strong budgetary allocation for defense. Such robust provisions set the stage for Howmet, which remains focused on its defense business.
The company also remains committed to increasing shareholder value through dividend payouts and share repurchases. For instance, in the first nine months of the year, it paid dividends worth $131 million and repurchased shares for $500 million. In August 2025, the company hiked its dividend by 20% to 12 cents per share (annually: 48 cents), marking its second dividend hike in 2025.
Earnings Estimate Revision
Earnings estimates for HWM have moved north over the past 60 days, reflecting analysts’ optimism.
The Zacks Consensus Estimate for 2025 earnings is pegged at $3.69 per share, suggesting year-over-year growth of 37.2%. The consensus mark for 2026 earnings is pinned at $4.41 per share, indicating a year-over-year increase of 19.7%. As earnings estimates increase, the stock is likely to follow suit.
Image Source: Zacks Investment Research
What Ails the Stock?
Despite the positives, Howmet has been witnessing persistent weakness in the commercial transportation market. In third-quarter 2025, revenues from the commercial transportation market declined 3% on a year-over-year basis, following 14% and 4% declines in first and second quarters, respectively. Lower commercial truck builds, given tariff-related and economic uncertainty in North America, have been impacting the company’s near-term performance.
HWM has also 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. Selling, general, administrative and other expenses also increased 4.2% to $347 million in the same year due to higher employment costs. The trend continued in the first nine months of 2025, with the cost of goods sold increasing 5% to $4.02 billion.
Stock Valuation
Howmet’s lofty valuation remains another concern. The stock trades at a forward 12-month price-to-earnings (P/E) ratio of 48.45X, higher than the industry average of 31.64X. Also, it is overvalued compared with its peers, RTX Corp. and General Dynamics. Notably, RTX Corp. and General Dynamics are trading at 28.26X and 20.95X, respectively. This elevated valuation could make the stock vulnerable to further pullbacks if market sentiment sours.
Image Source: Zacks Investment Research
Final Take on HWM
Despite Howmet’s solid momentum across end markets 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 Trades Near 52-Week High: Should You Buy the Stock or Wait?
Key Takeaways
Howmet Aerospace Inc. (HWM - Free Report) has been on a great run on the bourses lately, as the stock was hovering at more than $211 per share in the last three trading sessions. Shares of the advanced engineered solutions provider for the aerospace and transportation industries closed at $214.69 on Tuesday, close to its 52-week high of $216.38.
Over the past year, the stock has surged 92.3%, outpacing the S&P 500 composite and the industry’s growth of 19% and 34.7%, respectively. The company has also outperformed other industry players like RTX Corporation (RTX - Free Report) and General Dynamics Corporation (GD - Free Report) , which have returned 65.9% and 39%, respectively, over the said time frame.
HWM Outperforms Industry & the S&P 500
Image Source: Zacks Investment Research
The stock is also 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 Trade Above 50-Day and 200-Day SMAs
Image Source: Zacks Investment Research
Factors Favoring the Company
The strongest driver of Howmet’s business at the moment is the commercial aerospace market. The strength in air travel continues, with wide-body aircraft demand also picking up, supporting continued OEM spending. Pickup in air travel has been positive for the company as the increased usage of aircraft spurs spending on parts and products that the company provides. Solid demand for air travel is also encouraging airlines to purchase more aircraft, which is again driving their sales.
In the third quarter of 2025, revenues from the commercial aerospace market increased 15% year over year, constituting 53% of the company’s business. Also, in the first and second quarters, revenues from the market increased 9% and 8% year over year, respectively. The sustained strength was attributed to increasing demand for engine spares and a record backlog for new, more fuel-efficient aircraft with reduced carbon emissions. Also, healthy build rates at Airbus for A320 and A350 aircraft, along with an expected production recovery in the Boeing 737 MAX aircraft, hold promise for HWM’s spare engine demand.
Expanding the defense budget remains another growth catalyst for Howmet. The defense aerospace industry has also been witnessing positive momentum, cushioned by steady government support. HWM has been witnessing robust orders for engine spares for the F-35 program and spares for legacy fighters like the F-15 and the F-16. In the third quarter, revenues from the defense aerospace market surged 24% year over year, constituting 17% of the company’s revenues.
It's worth noting that in July 2025, the House of Representatives passed the fiscal year 2026 Defense Appropriations Act, providing a strong budgetary allocation for defense. Such robust provisions set the stage for Howmet, which remains focused on its defense business.
The company also remains committed to increasing shareholder value through dividend payouts and share repurchases. For instance, in the first nine months of the year, it paid dividends worth $131 million and repurchased shares for $500 million. In August 2025, the company hiked its dividend by 20% to 12 cents per share (annually: 48 cents), marking its second dividend hike in 2025.
Earnings Estimate Revision
Earnings estimates for HWM have moved north over the past 60 days, reflecting analysts’ optimism.
The Zacks Consensus Estimate for 2025 earnings is pegged at $3.69 per share, suggesting year-over-year growth of 37.2%. The consensus mark for 2026 earnings is pinned at $4.41 per share, indicating a year-over-year increase of 19.7%. As earnings estimates increase, the stock is likely to follow suit.
Image Source: Zacks Investment Research
What Ails the Stock?
Despite the positives, Howmet has been witnessing persistent weakness in the commercial transportation market. In third-quarter 2025, revenues from the commercial transportation market declined 3% on a year-over-year basis, following 14% and 4% declines in first and second quarters, respectively. Lower commercial truck builds, given tariff-related and economic uncertainty in North America, have been impacting the company’s near-term performance.
HWM has also 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. Selling, general, administrative and other expenses also increased 4.2% to $347 million in the same year due to higher employment costs. The trend continued in the first nine months of 2025, with the cost of goods sold increasing 5% to $4.02 billion.
Stock Valuation
Howmet’s lofty valuation remains another concern. The stock trades at a forward 12-month price-to-earnings (P/E) ratio of 48.45X, higher than the industry average of 31.64X. Also, it is overvalued compared with its peers, RTX Corp. and General Dynamics. Notably, RTX Corp. and General Dynamics are trading at 28.26X and 20.95X, respectively. This elevated valuation could make the stock vulnerable to further pullbacks if market sentiment sours.
Image Source: Zacks Investment Research
Final Take on HWM
Despite Howmet’s solid momentum across end markets 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.