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Should Howmet Stock Be Added to Your Portfolio Ahead of Q3 Earnings?
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Key Takeaways
HWM's Q3 earnings and revenues are projected to grow 44.2% and 24%, respectively, year over year.
Strong commercial and defense aerospace demand, higher aircraft build rates and the CAM buyout may aid HWM.
HWM's positive Earnings ESP of 0.21% signals beat potential, but its premium valuation remains a concern.
Howmet Aerospace Inc. (HWM - Free Report) is scheduled to release third-quarter 2026 results on Oct. 29, before market open. The Zacks Consensus Estimate for earnings is currently pegged at $1.37 per share on revenues of $2.59 billion.
The company’s third-quarter earnings estimates have increased a penny over the past 30 days. The bottom-line projection indicates an increase of 44.2% from the year-ago number. The Zacks Consensus Estimate for quarterly revenues indicates year-over-year growth of 24%. In the last reported quarter, Howmet delivered an earnings surprise of 8.1%.
Image Source: Zacks Investment Research
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 before they are reported with our Earnings ESP Filter.
Howmet’s third-quarter results are anticipated to benefit from strong momentum 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.
Robust demand for engine spares and a record backlog level, supported by improved build rates of Boeing’s 737 MAX aircraft and Airbus’ A320 and A350 aircraft, are likely to drive results for HWM in the quarter. The Zacks Consensus Estimate for revenues from the commercial aerospace market is pegged at $1.42 billion, indicating a 27.8% 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 a solid defense budget. HWM is continuing to experience strong 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 $401 million, indicating 12.3% growth from the year-ago quarter’s number.
Recovery of the commercial transportation market served by the Forged Wheels segment is expected to augment its results. Despite volume pressures, signs of recovery in the North American market augur well. The consensus estimate for revenues from the commercial transportation market is pegged at $344 million, indicating a 14.3% increase on a year-over-year basis.
In April 2026, Howmet acquired Stanley Black & Decker, Inc.'s (SWK - Free Report) Consolidated Aerospace Manufacturing LLC (“CAM”) business for $1.8 billion. The acquisition, which strengthened HWM’s aerospace fastening solutions portfolio and engineering capabilities, is likely to have contributed to the company’s quarterly revenues.
However, rising operating costs related to growth initiatives and inflationary pressures are expected to have affected Howmet’s bottom line. Also, the company 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 results.
HWM’s Price Performance
HWM shares have declined 5.2% in the year-to-date period compared with the Zacks Aerospace - Defense industry’s decline of 16.1% and the S&P 500’s growth of 10.6%. In comparison, the company’s peers, GE Aerospace (GE - Free Report) and Textron Inc. (TXT - Free Report) have lost 6.4% and 10.4%, respectively, in the same period.
YTD 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 31.19X, higher than the industry average of 27.07X. This elevated valuation could make the stock vulnerable to further pullbacks if market sentiment sours. In comparison with HWM’s valuation, Textron is trading cheaper, while GE Aerospace has a lofty valuation. Notably, GE Aerospace and Textron are currently trading at 31.86X and 10.90X, respectively.
Price-to-Earnings (Forward 12 Months)
Image Source: Zacks Investment Research
Investment Thesis
Howmet’s strong foothold in the commercial and defense aerospace markets is expected to drive its long-term growth. Also, favorable spending environment could create additional contract opportunities for Howmet, given its focus on the defense market, and support revenue growth. The company is also stepping up its focus on new initiatives, especially in new defense projects. As higher funding is expected to support military-aircraft programs, HWM is positioned to sustain healthy demand momentum in the coming quarters.
Also, recovery in the commercial transportation market augurs well for its long-term growth. However, the company’s expensive valuation warrants a cautious approach for existing investors.
Final Thoughts
Howmet’s strong foothold and persistent strength in the commercial and defense aerospace markets, driven by solid build rates, aftermarket demand and a robust defense budget, bode well for growth. Given the strength in most of its served markets, the company has built a sound liquidity position that supports its shareholder-friendly policies.
Despite its expensive valuation, given the positive analyst sentiment and its growth prospects, the time appears right for potential investors to bet on this company.
View the Zacks #1 Rank List
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Should Howmet Stock Be Added to Your Portfolio Ahead of Q3 Earnings?
Key Takeaways
Howmet Aerospace Inc. (HWM - Free Report) is scheduled to release third-quarter 2026 results on Oct. 29, before market open. The Zacks Consensus Estimate for earnings is currently pegged at $1.37 per share on revenues of $2.59 billion.
The company’s third-quarter earnings estimates have increased a penny over the past 30 days. The bottom-line projection indicates an increase of 44.2% from the year-ago number. The Zacks Consensus Estimate for quarterly revenues indicates year-over-year growth of 24%. In the last reported quarter, Howmet delivered an earnings surprise of 8.1%.
Image Source: Zacks Investment Research
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 before they are reported with our Earnings ESP Filter.
HWM has an Earnings ESP of +0.21% and a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Howmet Aerospace Inc. Price and EPS Surprise
Howmet Aerospace Inc. price-eps-surprise | Howmet Aerospace Inc. Quote
Factors to Note Ahead of Howmet’s Q3 Results
Howmet’s third-quarter results are anticipated to benefit from strong momentum 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.
Robust demand for engine spares and a record backlog level, supported by improved build rates of Boeing’s 737 MAX aircraft and Airbus’ A320 and A350 aircraft, are likely to drive results for HWM in the quarter. The Zacks Consensus Estimate for revenues from the commercial aerospace market is pegged at $1.42 billion, indicating a 27.8% 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 a solid defense budget. HWM is continuing to experience strong 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 $401 million, indicating 12.3% growth from the year-ago quarter’s number.
Recovery of the commercial transportation market served by the Forged Wheels segment is expected to augment its results. Despite volume pressures, signs of recovery in the North American market augur well. The consensus estimate for revenues from the commercial transportation market is pegged at $344 million, indicating a 14.3% increase on a year-over-year basis.
In April 2026, Howmet acquired Stanley Black & Decker, Inc.'s (SWK - Free Report) Consolidated Aerospace Manufacturing LLC (“CAM”) business for $1.8 billion. The acquisition, which strengthened HWM’s aerospace fastening solutions portfolio and engineering capabilities, is likely to have contributed to the company’s quarterly revenues.
However, rising operating costs related to growth initiatives and inflationary pressures are expected to have affected Howmet’s bottom line. Also, the company 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 results.
HWM’s Price Performance
HWM shares have declined 5.2% in the year-to-date period compared with the Zacks Aerospace - Defense industry’s decline of 16.1% and the S&P 500’s growth of 10.6%. In comparison, the company’s peers, GE Aerospace (GE - Free Report) and Textron Inc. (TXT - Free Report) have lost 6.4% and 10.4%, respectively, in the same period.
YTD 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 31.19X, higher than the industry average of 27.07X. This elevated valuation could make the stock vulnerable to further pullbacks if market sentiment sours. In comparison with HWM’s valuation, Textron is trading cheaper, while GE Aerospace has a lofty valuation. Notably, GE Aerospace and Textron are currently trading at 31.86X and 10.90X, respectively.
Price-to-Earnings (Forward 12 Months)
Image Source: Zacks Investment Research
Investment Thesis
Howmet’s strong foothold in the commercial and defense aerospace markets is expected to drive its long-term growth. Also, favorable spending environment could create additional contract opportunities for Howmet, given its focus on the defense market, and support revenue growth. The company is also stepping up its focus on new initiatives, especially in new defense projects. As higher funding is expected to support military-aircraft programs, HWM is positioned to sustain healthy demand momentum in the coming quarters.
Also, recovery in the commercial transportation market augurs well for its long-term growth. However, the company’s expensive valuation warrants a cautious approach for existing investors.
Final Thoughts
Howmet’s strong foothold and persistent strength in the commercial and defense aerospace markets, driven by solid build rates, aftermarket demand and a robust defense budget, bode well for growth. Given the strength in most of its served markets, the company has built a sound liquidity position that supports its shareholder-friendly policies.
Despite its expensive valuation, given the positive analyst sentiment and its growth prospects, the time appears right for potential investors to bet on this company.