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Howmet Q4 Earnings Preview: Should You Buy the Stock Now or Wait?
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Key Takeaways
HWM is set to report Q4 earnings on Feb. 12, with EPS seen up 31.1% and revenues projected to rise 13.2%.
HWM is benefiting from strong commercial and defense aerospace demand, lifting engine and spare parts sales.
HWM faces headwinds from weaker commercial transportation demand and lingering supply-chain challenges.
Howmet Aerospace Inc. (HWM - Free Report) is scheduled to release fourth-quarter 2025 results on Feb. 12, before market open. The Zacks Consensus Estimate for earnings is currently pegged at 97 cents per share on revenues of $2.14 billion.
The company’s fourth-quarter earnings estimates have increased a penny over the past 30 days. The bottom-line projection indicates an increase of 31.1% from the year-ago number. The Zacks Consensus Estimate for quarterly revenues indicates year-over-year growth of 13.2%.
Image Source: Zacks Investment Research
Earnings Surprise History
Howmet has an impressive earnings surprise history. The company’s earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 5.9%. In the last reported quarter, it delivered an earnings surprise of 4.4%.
Our proven model predicts an earnings beat for the company this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Howmet’s fourth-quarter results are anticipated to benefit from persistent strength in its commercial aerospace market. Solid demand in the air transport market has been driving demand for wide-body aircraft, thereby 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 it provides.
Growing popularity for new, more fuel-efficient aircraft with reduced carbon emissions and increased spare demand for engines are likely to have proven favorable for HWM in the fourth quarter. The Zacks Consensus Estimate for revenues from the commercial aerospace market is pegged at $1.14 billion, indicating a 14% rise from the year-ago quarter number.
Also, the company’s defense aerospace market has been playing a significant role in driving its overall growth, cushioned by steady government support. HWM is continuing to experience robust orders for engine spares for legacy fighters like the F-15 and the F-16. This is expected to have augmented its top-line performance in the to-be-reported quarter. The consensus estimate for revenues from the defense aerospace market is pegged at $365 million, indicating 19.7% growth from the year-ago quarter’s number.
However, Howmet has been facing weakness in the commercial transportation market served by the Forged Wheels segment, due to lower OEM builds and tariff-related impacts in North America. This is likely to have affected its fourth-quarter performance. The consensus estimate for revenues from the commercial transportation market is pegged at $279 million, indicating a 6.4% decline on a year-over-year basis.
Howmet is dependent on a global supply chain, and in recent years, it has experienced supply-chain disruptions in the aerospace sector that resulted in delays and increased costs. Despite moderation, the persistence of supply-chain issues in the aerospace sector is likely to have affected its operations and performance.
HWM’s Price Performance
HWM shares have gained 7.8% in the past three months compared with the Zacks Aerospace - Defense industry and the S&P 500’s growth of 5.6% and 1.7%, respectively. In comparison, the company’s peers, General Dynamics (GD - Free Report) and RTX Corporation (RTX - Free Report) have gained 2.2% and 9.4%, respectively, in the same period.
Three-Month Price Performance
Image Source: Zacks Investment Research
Howmet’s Valuation Remains an Overhang
HWM is trading at a forward 12-month price-to-earnings (P/E) ratio of 49.65X, much higher than the industry average of 32.61X. This elevated valuation could make the stock vulnerable to further pullbacks if market sentiment sours. In comparison with HWM’s valuation, its peers, General Dynamics and RTX Corp. are trading cheaper. Notably, General Dynamics and RTX Corp. are currently trading at 21.35X and 28.48X, respectively.
Price-to-Earnings (Forward 12 Months)
Image Source: Zacks Investment Research
Investment Thesis
Howmet’s robust and diversified portfolio, along with strength in the commercial and defense aerospace markets, is expected to drive its long-term growth. Recently, the House of Representatives passed the fiscal year 2026 Defense Appropriations Act, providing a total discretionary allocation of $838.7 billion. Such robust budgetary provisions set the stage for Howmet, which remains focused on its defense business to win more contracts, which is likely to boost its top line.
However, persistent softness in the commercial transportation market remains concerning for its near-term performance. Also, the company’s expensive valuation warrants a cautious approach for existing investors.
Final Thoughts
Despite strong fundamentals, Howmet has been subject to some near-term challenges. Investors should monitor the developments pertaining to the stock closely for a more appropriate entry point, as an erroneous and hasty decision could affect portfolio gains. Therefore, it might be prudent to wait for HWM’s earnings report before making an investment decision.
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Howmet Q4 Earnings Preview: Should You Buy the Stock Now or Wait?
Key Takeaways
Howmet Aerospace Inc. (HWM - Free Report) is scheduled to release fourth-quarter 2025 results on Feb. 12, before market open. The Zacks Consensus Estimate for earnings is currently pegged at 97 cents per share on revenues of $2.14 billion.
The company’s fourth-quarter earnings estimates have increased a penny over the past 30 days. The bottom-line projection indicates an increase of 31.1% from the year-ago number. The Zacks Consensus Estimate for quarterly revenues indicates year-over-year growth of 13.2%.
Image Source: Zacks Investment Research
Earnings Surprise History
Howmet has an impressive earnings surprise history. The company’s earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 5.9%. In the last reported quarter, it delivered an earnings surprise of 4.4%.
Howmet Aerospace Inc. Price and EPS Surprise
Howmet Aerospace Inc. price-eps-surprise | Howmet Aerospace Inc. Quote
Earnings Whispers for HWM
Our proven model predicts an earnings beat for the company this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
HWM has an Earnings ESP of +0.38% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors to Note Ahead of Howmet’s Q4 Results
Howmet’s fourth-quarter results are anticipated to benefit from persistent strength in its commercial aerospace market. Solid demand in the air transport market has been driving demand for wide-body aircraft, thereby 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 it provides.
Growing popularity for new, more fuel-efficient aircraft with reduced carbon emissions and increased spare demand for engines are likely to have proven favorable for HWM in the fourth quarter. The Zacks Consensus Estimate for revenues from the commercial aerospace market is pegged at $1.14 billion, indicating a 14% rise from the year-ago quarter number.
Also, the company’s defense aerospace market has been playing a significant role in driving its overall growth, cushioned by steady government support. HWM is continuing to experience robust orders for engine spares for legacy fighters like the F-15 and the F-16. This is expected to have augmented its top-line performance in the to-be-reported quarter. The consensus estimate for revenues from the defense aerospace market is pegged at $365 million, indicating 19.7% growth from the year-ago quarter’s number.
However, Howmet has been facing weakness in the commercial transportation market served by the Forged Wheels segment, due to lower OEM builds and tariff-related impacts in North America. This is likely to have affected its fourth-quarter performance. The consensus estimate for revenues from the commercial transportation market is pegged at $279 million, indicating a 6.4% decline on a year-over-year basis.
Howmet is dependent on a global supply chain, and in recent years, it has experienced supply-chain disruptions in the aerospace sector that resulted in delays and increased costs. Despite moderation, the persistence of supply-chain issues in the aerospace sector is likely to have affected its operations and performance.
HWM’s Price Performance
HWM shares have gained 7.8% in the past three months compared with the Zacks Aerospace - Defense industry and the S&P 500’s growth of 5.6% and 1.7%, respectively. In comparison, the company’s peers, General Dynamics (GD - Free Report) and RTX Corporation (RTX - Free Report) have gained 2.2% and 9.4%, respectively, in the same period.
Three-Month Price Performance
Image Source: Zacks Investment Research
Howmet’s Valuation Remains an Overhang
HWM is trading at a forward 12-month price-to-earnings (P/E) ratio of 49.65X, much higher than the industry average of 32.61X. This elevated valuation could make the stock vulnerable to further pullbacks if market sentiment sours. In comparison with HWM’s valuation, its peers, General Dynamics and RTX Corp. are trading cheaper. Notably, General Dynamics and RTX Corp. are currently trading at 21.35X and 28.48X, respectively.
Price-to-Earnings (Forward 12 Months)
Image Source: Zacks Investment Research
Investment Thesis
Howmet’s robust and diversified portfolio, along with strength in the commercial and defense aerospace markets, is expected to drive its long-term growth. Recently, the House of Representatives passed the fiscal year 2026 Defense Appropriations Act, providing a total discretionary allocation of $838.7 billion. Such robust budgetary provisions set the stage for Howmet, which remains focused on its defense business to win more contracts, which is likely to boost its top line.
However, persistent softness in the commercial transportation market remains concerning for its near-term performance. Also, the company’s expensive valuation warrants a cautious approach for existing investors.
Final Thoughts
Despite strong fundamentals, Howmet has been subject to some near-term challenges. Investors should monitor the developments pertaining to the stock closely for a more appropriate entry point, as an erroneous and hasty decision could affect portfolio gains. Therefore, it might be prudent to wait for HWM’s earnings report before making an investment decision.