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Is Howmet Aerospace Stock a Buy After Q3 Earnings Beat & Raised Outlook?
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Key Takeaways
HWM's Q3 earnings surged 54% as revenues grew 29%, driven by robust commercial and defense aerospace demand.
Howmet raised its 2026 revenue outlook to $10.29-$10.31 billion and adjusted EPS guidance to $5.49-$5.51.
HWM's rising estimates and strong engine spare demand support growth, though its premium valuation weighs.
Howmet Aerospace Inc. (HWM - Free Report) reported better-than-expected third-quarter 2026 results on Oct. 29. Adjusted earnings of $1.46 per share surpassed the Zacks Consensus Estimate by 6.6% and surged 54% year over year.
Total revenues of $2.7 billion surpassed the consensus estimate by 4.2% and increased 29% year over year. The third-quarter results benefited from persistent strength in its commercial and defense aerospace markets.
HWM has been reporting strong earnings results courtesy of solid financial and operational performance from its segments. Backed by robust results and improving fundamentals, the company lifted its financial outlook. For 2026, Howmet Aerospace raised its revenue outlook to $10.29-$10.31 billion from $10.00-$10.10 billion. Adjusted EBITDA is now anticipated between $3.325 billion and $3.335 billion, higher than $3.21-$3.25 billion expected earlier. It also raised its adjusted earnings guidance to $5.49-$5.51 per share from $5.23-$5.31.
Factors Contributing to Howmet Aerospace’s Performance
The strongest driver of Howmet Aerospace’s business at the moment is the commercial aerospace market. 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.
In the third quarter of 2026, revenues from the commercial aerospace market surged 32% year over year, constituting 54% of the company’s business. Also, in the first and second quarters, revenues from the market increased 20% and 28%, respectively, on a year-over-year basis. The sustained strength was attributed to increasing demand and a record backlog for engine spares. Healthy build rates at Airbus for A320 and A350 aircraft, along with a 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 Aerospace. The defense aerospace industry has also been witnessing positive momentum, cushioned by steady government support. HWM has been witnessing strong engine spare orders for the F-35 program and other legacy fighters. In the third quarter, revenues from the defense aerospace market increased 10% year over year, constituting 15% of the company’s revenues.
Supported by solid demand in both the defense and commercial aerospace markets, Howmet provided strong fourth-quarter 2026 guidance. For the upcoming quarter, HWM expects revenues of $2.74-$2.76 billion and adjusted EBITDA of $895-$905 million.
HWM also remains open to strengthening its business through acquisitions. In April 2026, it completed the acquisition of Stanley Black & Decker’s (SWK - Free Report) business unit, Consolidated Aerospace Manufacturing LLC (“CAM”), for $1.8 billion. CAM’s well-known brands, engineering expertise and strong customer relationships have strengthened its aerospace fastening solutions portfolio.
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 $153 million. In July 2026, the company hiked its dividend by 17% to 14 cents per share (annually: 56 cents). Also, year-to-date through October, it repurchased shares worth $1.1 billion.
HWM Shares One-Year Price Performance
Shares of the company have gained 6.8% in the past year compared with the S&P 500 composite’s 9.8% growth and the industry’s 15.3% decline. It has outperformed other industry players like Textron Inc. (TXT - Free Report) and TransDigm Group Incorporated (TDG - Free Report) , which have returned 5.3% and declined 6.3%, respectively, over the said time frame.
HWM Stock’s Price Performance
Image Source: Zacks Investment Research
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 increased 3.6% to $5.48 per share, suggesting year-over-year growth of 45.4%. The consensus mark for 2027 earnings moved up 3% to $6.50 per share, indicating a year-over-year increase of 18.6%. As earnings estimates increase, the stock is likely to follow suit.
Valuation Remains an Overhang
Image Source: Zacks Investment Research
The stock trades at a forward 12-month price-to-earnings (P/E) ratio of 34.46X, higher than the industry average of 29.45X. Also, it is overvalued compared with its peers, Textron and TransDigm Group. Notably, Textron and TransDigm Group are trading at 12.01X and 25.13X, respectively.
Should You Invest in HWM Now?
Persistent strength across the commercial and defense aerospace markets, supported by healthy build rates, robust engine spare demand and a strong defense budget, positions Howmet Aerospace favorably for strong growth in the quarters ahead. Built on a sound liquidity position, HWM’s shareholder-friendly policies also add to its appeal.
View the Zacks #1 Rank List
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Is Howmet Aerospace Stock a Buy After Q3 Earnings Beat & Raised Outlook?
Key Takeaways
Howmet Aerospace Inc. (HWM - Free Report) reported better-than-expected third-quarter 2026 results on Oct. 29. Adjusted earnings of $1.46 per share surpassed the Zacks Consensus Estimate by 6.6% and surged 54% year over year.
Total revenues of $2.7 billion surpassed the consensus estimate by 4.2% and increased 29% year over year. The third-quarter results benefited from persistent strength in its commercial and defense aerospace markets.
HWM has been reporting strong earnings results courtesy of solid financial and operational performance from its segments. Backed by robust results and improving fundamentals, the company lifted its financial outlook. For 2026, Howmet Aerospace raised its revenue outlook to $10.29-$10.31 billion from $10.00-$10.10 billion. Adjusted EBITDA is now anticipated between $3.325 billion and $3.335 billion, higher than $3.21-$3.25 billion expected earlier. It also raised its adjusted earnings guidance to $5.49-$5.51 per share from $5.23-$5.31.
Factors Contributing to Howmet Aerospace’s Performance
The strongest driver of Howmet Aerospace’s business at the moment is the commercial aerospace market. 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.
In the third quarter of 2026, revenues from the commercial aerospace market surged 32% year over year, constituting 54% of the company’s business. Also, in the first and second quarters, revenues from the market increased 20% and 28%, respectively, on a year-over-year basis. The sustained strength was attributed to increasing demand and a record backlog for engine spares. Healthy build rates at Airbus for A320 and A350 aircraft, along with a 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 Aerospace. The defense aerospace industry has also been witnessing positive momentum, cushioned by steady government support. HWM has been witnessing strong engine spare orders for the F-35 program and other legacy fighters. In the third quarter, revenues from the defense aerospace market increased 10% year over year, constituting 15% of the company’s revenues.
Supported by solid demand in both the defense and commercial aerospace markets, Howmet provided strong fourth-quarter 2026 guidance. For the upcoming quarter, HWM expects revenues of $2.74-$2.76 billion and adjusted EBITDA of $895-$905 million.
HWM also remains open to strengthening its business through acquisitions. In April 2026, it completed the acquisition of Stanley Black & Decker’s (SWK - Free Report) business unit, Consolidated Aerospace Manufacturing LLC (“CAM”), for $1.8 billion. CAM’s well-known brands, engineering expertise and strong customer relationships have strengthened its aerospace fastening solutions portfolio.
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 $153 million. In July 2026, the company hiked its dividend by 17% to 14 cents per share (annually: 56 cents). Also, year-to-date through October, it repurchased shares worth $1.1 billion.
HWM Shares One-Year Price Performance
Shares of the company have gained 6.8% in the past year compared with the S&P 500 composite’s 9.8% growth and the industry’s 15.3% decline. It has outperformed other industry players like Textron Inc. (TXT - Free Report) and TransDigm Group Incorporated (TDG - Free Report) , which have returned 5.3% and declined 6.3%, respectively, over the said time frame.
HWM Stock’s Price Performance
Image Source: Zacks Investment Research
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 increased 3.6% to $5.48 per share, suggesting year-over-year growth of 45.4%. The consensus mark for 2027 earnings moved up 3% to $6.50 per share, indicating a year-over-year increase of 18.6%. As earnings estimates increase, the stock is likely to follow suit.
Valuation Remains an Overhang
Image Source: Zacks Investment Research
The stock trades at a forward 12-month price-to-earnings (P/E) ratio of 34.46X, higher than the industry average of 29.45X. Also, it is overvalued compared with its peers, Textron and TransDigm Group. Notably, Textron and TransDigm Group are trading at 12.01X and 25.13X, respectively.
Should You Invest in HWM Now?
Persistent strength across the commercial and defense aerospace markets, supported by healthy build rates, robust engine spare demand and a strong defense budget, positions Howmet Aerospace favorably for strong growth in the quarters ahead. Built on a sound liquidity position, HWM’s shareholder-friendly policies also add to its appeal.
Despite its expensive valuation, positive analyst sentiment and robust growth prospects indicate it is the right 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.