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Howmet Rises 21.4% in Past Year: Should You Buy the Stock?
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Key Takeaways
Howmet shares gained 21.4% in the past year, outperforming the S&P 500 and its industry.
HWM raised its 2026 revenue outlook to $10.00-$10.10 billion amid strong aerospace demand.
Howmet's growth outlook is supported by engine spares demand, but high debt and valuation pose risks.
Howmet Aerospace Inc.’s (HWM - Free Report) shares have gained 21.4% in the past year, outpacing the S&P 500’s gain of 15.4% and the industry’s 18.1% decline. The leading provider of jet engine components and fastening systems for the aerospace and transportation industries has also outshone its peers like Textron Inc. (TXT - Free Report) and L3Harris Technologies, Inc. (LHX - Free Report) , which have lost 11.6% and 22%, respectively, over the same time frame.
HWM Outperforms the Industry, S&P 500 & Peers
Image Source: Zacks Investment Research
Closing at $231.27 on Oct. 2, the stock is trading below its 52-week high of $310.00 but higher than its 52-week low of $183.83. However, the stock is trading below both its 50-day and 200-day moving averages. Let’s take a closer look at the company’s fundamentals, growth prospects and challenges to make an informed choice.
Factors Driving Howmet
Howmet continues to benefit from robust commercial aerospace demand. Strong narrow- and wide-body aircraft activity is driving higher OEM spending, while increased air travel is boosting aircraft utilization and demand for the company’s parts and products.
Revenues from the commercial aerospace market rose 28% year over year in the second quarter of 2026, accelerating from 20% growth in the first quarter. The market accounted for 53% of HWM’s total business, driven by strong demand for engine spares. Solid A320 and A350 build rates at Airbus and the recovery in Boeing 737 MAX production are expected to support demand for HWM’s engine spares.
While the commercial aerospace market has remained the major driver for the company, the defense side of the industry has also been witnessing positive momentum, cushioned by steady government support. HWM has been experiencing robust orders for engine spares for the F-35 program and other legacy fighters. Revenues from the defense aerospace market increased 11% year over year in the second quarter, constituting 15% of the company’s total business.
Howmet expects demand across the commercial aerospace, defense aerospace and gas turbine markets to rise in 2026, supported by higher engine spares demand. The company raised its 2026 revenue outlook to $10.00-$10.10 billion. Adjusted EBITDA is anticipated between $3.21 billion and $3.25 billion, with adjusted earnings projected at $5.23-$5.31 per share.
Howmet’s shareholder-return initiatives remain supportive. In the first half of the year, HWM paid $97 million in dividends. In July 2026, the company increased its quarterly dividend 17% to 14 cents per share, or 56 cents annually. Through July, Howmet also repurchased $800 million of shares year to date.
Howmet’s measures to reward shareholders are also encouraging. During the first half of the year, HWM distributed $97 million in dividends. In July 2026, it raised its quarterly dividend by 17% to 14 cents per share, equivalent to 56 cents annually. Additionally, through July, the company had repurchased $800 million worth of shares year to date.
Howmet’s shareholder-friendly policies are supported by its healthy liquidity position. Exiting the second quarter, HWM’s cash equivalents were $563 million, higher than its short-term borrowings of $450 million. In the first half of the year, Howmet generated cash of $1.04 billion from operating activities (up 48% year over year), while its free cash flow totaled $838 million (up 75% year over year).
Earnings Estimate Revision
Image Source: Zacks Investment Research
Earnings estimates for HWM have moved north over the past 60 days, reflecting analysts’ optimism.
The Zacks Consensus Estimate for 2026 earnings is pegged at $5.33 per share, suggesting year-over-year growth of 7.2%. The consensus mark for 2027 earnings is pinned at $6.38 per share, indicating a year-over-year increase of 7.4%. As earnings estimates increase, the stock is likely to follow suit.
Near-Term Concerns
Howmet’s high debt level remains a concern. Exiting the second quarter of 2026, the company’s long-term debt (less amount due within one year) was $4.1 billion. The same stood at $2.86 billion at 2025-end. This increase was primarily attributable to funds raised for the company’s Consolidated Aerospace Manufacturing buyout (in April 2026).
HWM’s Valuation
Image Source: Zacks Investment Research
The stock trades at a forward 12-month price-to-earnings (P/E) ratio of 37.73X, higher than the industry average of 28.37X. Also, it is overvalued compared with its peers, Textron and L3Harris Technologies. Notably, Textron and L3Harris Technologies are trading at 10.85X and 18.03X, respectively. This elevated valuation could make the stock vulnerable to further pullbacks if market sentiment sours.
Final Take on HWM
Strong trends across commercial and defense aerospace markets, driven by healthy production rates, engine spare demand and robust defense spending, support Howmet’s growth prospects. A solid liquidity position and shareholder-friendly actions further strengthen HWM’s investment appeal.
Despite its expensive valuation and rise in debt level, positive analyst sentiment, robust growth prospects and higher annual guidance for revenues and earnings indicate it is the appropriate time for potential investors to bet on this Zacks Rank #2 (Buy) company. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
View the Zacks #1 Rank List
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Howmet Rises 21.4% in Past Year: Should You Buy the Stock?
Key Takeaways
Howmet Aerospace Inc.’s (HWM - Free Report) shares have gained 21.4% in the past year, outpacing the S&P 500’s gain of 15.4% and the industry’s 18.1% decline. The leading provider of jet engine components and fastening systems for the aerospace and transportation industries has also outshone its peers like Textron Inc. (TXT - Free Report) and L3Harris Technologies, Inc. (LHX - Free Report) , which have lost 11.6% and 22%, respectively, over the same time frame.
HWM Outperforms the Industry, S&P 500 & Peers
Image Source: Zacks Investment Research
Closing at $231.27 on Oct. 2, the stock is trading below its 52-week high of $310.00 but higher than its 52-week low of $183.83. However, the stock is trading below both its 50-day and 200-day moving averages. Let’s take a closer look at the company’s fundamentals, growth prospects and challenges to make an informed choice.
Factors Driving Howmet
Howmet continues to benefit from robust commercial aerospace demand. Strong narrow- and wide-body aircraft activity is driving higher OEM spending, while increased air travel is boosting aircraft utilization and demand for the company’s parts and products.
Revenues from the commercial aerospace market rose 28% year over year in the second quarter of 2026, accelerating from 20% growth in the first quarter. The market accounted for 53% of HWM’s total business, driven by strong demand for engine spares. Solid A320 and A350 build rates at Airbus and the recovery in Boeing 737 MAX production are expected to support demand for HWM’s engine spares.
While the commercial aerospace market has remained the major driver for the company, the defense side of the industry has also been witnessing positive momentum, cushioned by steady government support. HWM has been experiencing robust orders for engine spares for the F-35 program and other legacy fighters. Revenues from the defense aerospace market increased 11% year over year in the second quarter, constituting 15% of the company’s total business.
Howmet expects demand across the commercial aerospace, defense aerospace and gas turbine markets to rise in 2026, supported by higher engine spares demand. The company raised its 2026 revenue outlook to $10.00-$10.10 billion. Adjusted EBITDA is anticipated between $3.21 billion and $3.25 billion, with adjusted earnings projected at $5.23-$5.31 per share.
Howmet’s shareholder-return initiatives remain supportive. In the first half of the year, HWM paid $97 million in dividends. In July 2026, the company increased its quarterly dividend 17% to 14 cents per share, or 56 cents annually. Through July, Howmet also repurchased $800 million of shares year to date.
Howmet’s measures to reward shareholders are also encouraging. During the first half of the year, HWM distributed $97 million in dividends. In July 2026, it raised its quarterly dividend by 17% to 14 cents per share, equivalent to 56 cents annually. Additionally, through July, the company had repurchased $800 million worth of shares year to date.
Howmet’s shareholder-friendly policies are supported by its healthy liquidity position. Exiting the second quarter, HWM’s cash equivalents were $563 million, higher than its short-term borrowings of $450 million. In the first half of the year, Howmet generated cash of $1.04 billion from operating activities (up 48% year over year), while its free cash flow totaled $838 million (up 75% year over year).
Earnings Estimate Revision
Image Source: Zacks Investment Research
Earnings estimates for HWM have moved north over the past 60 days, reflecting analysts’ optimism.
The Zacks Consensus Estimate for 2026 earnings is pegged at $5.33 per share, suggesting year-over-year growth of 7.2%. The consensus mark for 2027 earnings is pinned at $6.38 per share, indicating a year-over-year increase of 7.4%. As earnings estimates increase, the stock is likely to follow suit.
Near-Term Concerns
Howmet’s high debt level remains a concern. Exiting the second quarter of 2026, the company’s long-term debt (less amount due within one year) was $4.1 billion. The same stood at $2.86 billion at 2025-end. This increase was primarily attributable to funds raised for the company’s Consolidated Aerospace Manufacturing buyout (in April 2026).
HWM’s Valuation
Image Source: Zacks Investment Research
The stock trades at a forward 12-month price-to-earnings (P/E) ratio of 37.73X, higher than the industry average of 28.37X. Also, it is overvalued compared with its peers, Textron and L3Harris Technologies. Notably, Textron and L3Harris Technologies are trading at 10.85X and 18.03X, respectively. This elevated valuation could make the stock vulnerable to further pullbacks if market sentiment sours.
Final Take on HWM
Strong trends across commercial and defense aerospace markets, driven by healthy production rates, engine spare demand and robust defense spending, support Howmet’s growth prospects. A solid liquidity position and shareholder-friendly actions further strengthen HWM’s investment appeal.
Despite its expensive valuation and rise in debt level, positive analyst sentiment, robust growth prospects and higher annual guidance for revenues and earnings indicate it is the appropriate time for potential investors to bet on this Zacks Rank #2 (Buy) company. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.