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Howmet Aerospace Inc. (HWM), headquartered in Pittsburgh, Pennsylvania, provides advanced engineered solutions for the aerospace and transportation industries. Valued at $38.8 billion by market cap, the company offers engines, fasteners, and structures, as well as forged wheels.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and HWM perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the aerospace & defense industry. HWM boasts robust financials driven by its dominance in aerospace, defense, and industrial markets. Its expertise in lightweight metals engineering and manufacturing secures key supplier status for aircraft engines and turbines. HWM's innovative products, such as advanced airfoils and specialized fasteners, meet stringent aerospace requirements, enhancing performance and efficiency.
Despite its notable strength, HWM slipped 3.6% from its 52-week high of $98.15, achieved on Aug. 28. Over the past three months, HWM stock has gained 18.2%, outperforming the Dow Jones Industrials Average’s ($DOWI) 7.3% gains during the same time frame.
In the longer term, shares of HWM rose 74.8% on a YTD basis and climbed 102.6% over the past 52 weeks, outperforming DOWI’s YTD gains of 10.4% and 20.2% returns over the last year.
To confirm the long-term bullish trend, HWM has been trading above its 200-day moving average since November 2023. It has been trading above its 50-day moving average since the end of July.
HWM’s impressive price action can be attributed to significant revenue growth in the commercial aerospace market driven by performance in their engine products and engineered structures segments. Additionally, positive forecasts for the industry, fueled by high demand and OEM backlogs, have boosted investor confidence.
On Jul. 30, HWM shares closed up more than 13% after reporting its Q2 results. Its adjusted EPS of $0.67 beat Wall Street expectations of $0.60. The company’s revenue was $1.9 billion, topping Wall Street forecasts of $1.8 billion. For Q3, HWM expects its adjusted EPS to be between $0.63 and $0.65. The company expects revenue to be between $1.85 billion and $1.87 billion.
HWM’s rival, TransDigm Group Incorporated (TDG), has lagged behind the HWM, with a 36% uptick on a YTD basis and 59.1% gains over the past 52 weeks.
Wall Street analysts are highly bullish on HWM’s prospects. The stock has a consensus “Strong Buy” rating from the 20 analysts covering it, and the mean price target of $102.45 suggests a potential upside of 8.3% from current price levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
