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Howmet's Transportation Market Under Pressure: Is the Risk Priced In?
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Key Takeaways
HWM's Forged Wheels volumes fell 8% year over year but rose 7% sequentially in the second quarter.
Lower OEM builds continue to weigh on commercial transportation demand, posing a near-term growth headwind.
Aerospace strength, including F-35 engine spares and fastening systems, is bolstering HWM's performance.
Howmet Aerospace Inc. (HWM - Free Report) continues to face weakness in the commercial transportation market, although conditions are showing early signs of improvement. In the second quarter of 2026, Forged Wheels revenues increased 14% year over year to $316 million, primarily driven by higher aluminum and other inflationary cost pass-through, despite an 8% year-over-year decline in volumes. However, volumes increased 7% sequentially, reflecting the beginning of a recovery in the North American commercial transportation market.
Despite the sequential improvement, commercial transportation demand remains a near-term headwind as lower OEM builds continue to weigh on volumes. Howmet's exposure to the market, particularly through its Forged Wheels business, may remain a drag on growth if the recovery progresses slowly.
As a global player, Howmet remains vulnerable to supply-chain volatility, which has already led to delays and higher costs in recent years. These persistent supply-chain challenges in the transportation and aerospace sectors are expected to continue affecting the company’s ability to deliver finished products to customers within the stipulated time.
Despite difficult conditions in the commercial transportation market, Howmet’s performance is being bolstered by sustained strength in the commercial and defense aerospace markets. Strong demand for engine spares for the F-35 program, aerospace fastening systems and airframe structural components further contributes to a promising outlook for the company.
Segment Snapshot of HWM’s Peers
Among its major peers, Textron Inc. (TXT - Free Report) reported 3% sales growth in the second quarter of 2026. Revenues from Textron’s Aviation segment increased 1% year over year in the same period. The solid performance of Textron’s segment was primarily driven by higher pricing.
Another peer, RTX Corporation (RTX - Free Report) , has been experiencing improving commercial OEM and commercial aftermarket sales in recent times. RTX Corp.’s second-quarter 2026 results reflected solid year-over-year sales growth of 8.2%. In particular, improvement in commercial aerospace bolstered quarterly results for both its Collins Aerospace and Pratt & Whitney business segments.
HWM's Price Performance, Valuation and Estimates
Shares of Howmet have surged 45% in the past year against the industry’s decline of 7.6%.
Image Source: Zacks Investment Research
From a valuation standpoint, HWM is trading at a forward price-to-earnings ratio of 43.02X, above the industry’s average of 30.57X. Howmet carries a Value Score of F.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for HWM’s earnings has been on the rise over the past 60 days.
View the Zacks #1 Rank List
Image: Bigstock
Howmet's Transportation Market Under Pressure: Is the Risk Priced In?
Key Takeaways
Howmet Aerospace Inc. (HWM - Free Report) continues to face weakness in the commercial transportation market, although conditions are showing early signs of improvement. In the second quarter of 2026, Forged Wheels revenues increased 14% year over year to $316 million, primarily driven by higher aluminum and other inflationary cost pass-through, despite an 8% year-over-year decline in volumes. However, volumes increased 7% sequentially, reflecting the beginning of a recovery in the North American commercial transportation market.
Despite the sequential improvement, commercial transportation demand remains a near-term headwind as lower OEM builds continue to weigh on volumes. Howmet's exposure to the market, particularly through its Forged Wheels business, may remain a drag on growth if the recovery progresses slowly.
As a global player, Howmet remains vulnerable to supply-chain volatility, which has already led to delays and higher costs in recent years. These persistent supply-chain challenges in the transportation and aerospace sectors are expected to continue affecting the company’s ability to deliver finished products to customers within the stipulated time.
Despite difficult conditions in the commercial transportation market, Howmet’s performance is being bolstered by sustained strength in the commercial and defense aerospace markets. Strong demand for engine spares for the F-35 program, aerospace fastening systems and airframe structural components further contributes to a promising outlook for the company.
Segment Snapshot of HWM’s Peers
Among its major peers, Textron Inc. (TXT - Free Report) reported 3% sales growth in the second quarter of 2026. Revenues from Textron’s Aviation segment increased 1% year over year in the same period. The solid performance of Textron’s segment was primarily driven by higher pricing.
Another peer, RTX Corporation (RTX - Free Report) , has been experiencing improving commercial OEM and commercial aftermarket sales in recent times. RTX Corp.’s second-quarter 2026 results reflected solid year-over-year sales growth of 8.2%. In particular, improvement in commercial aerospace bolstered quarterly results for both its Collins Aerospace and Pratt & Whitney business segments.
HWM's Price Performance, Valuation and Estimates
Shares of Howmet have surged 45% in the past year against the industry’s decline of 7.6%.
Image Source: Zacks Investment Research
From a valuation standpoint, HWM is trading at a forward price-to-earnings ratio of 43.02X, above the industry’s average of 30.57X. Howmet carries a Value Score of F.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for HWM’s earnings has been on the rise over the past 60 days.
Image Source: Zacks Investment Research
Howmet currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.