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Howmet Aerospace (HWM)
NYSE:HWM
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Howmet Aerospace
(NYSE:HWM)
79Outperform
Positive Factors
Financial Performance
Q1's blowout incremental margin highlights HWM's superior execution and pricing approach.
Market Position
HWM is favored as a large cap, very well-managed aerospace company with pricing power.
Market Share
HWM likely captures fastener share following the SPS fire, creating a near- and long-term opportunity to secure incremental share.
Negative Factors
Inventory Risks
Plant cautioned the high inventory levels being kept at Boeing do pose some destocking risk for the industry at large.
Operational Challenges
Howmet reportedly may halt orders due to Trump tariffs.
Sales Forecast
HWM expects H2 Forged Wheels sales to drop year over year versus its prior view of positive H2 growth.
Howmet Aerospace (HWM) vs. S&P 500 (SPY)
Market Cap
$59.87B
Dividend Yield0.21%
Average Volume (3M)2.96M
Price to Earnings (P/E)52.6
Beta (1Y)1.35
Revenue Growth10.01%
EPS Growth47.99%
CountryUS
Employees23,930
SectorIndustrials
Sector Strength78
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)2.81
Shares Outstanding404,463,750
10 Day Avg. Volume2,648,090
30 Day Avg. Volume2,963,861
Financial Highlights & Ratios
PEG Ratio1.00
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap0.79
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit20.59
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$151.94Price Target Upside-1.38% Downside
Rating ConsensusStrong Buy
Number of Analyst Covering20
Howmet Aerospace Business Overview & Revenue Model
Company DescriptionHowmet Aerospace Inc. provides advanced engineered solutions for the aerospace and transportation industries in the United States, Japan, France, Germany, the United Kingdom, Mexico, Italy, Canada, Poland, China, and internationally. It operates through four segments: Engine Products, Fastening Systems, Engineered Structures, and Forged Wheels. The Engine Products segment offers airfoils and seamless rolled rings primarily for aircraft engines and industrial gas turbines; and rotating parts, as well as structural parts. The Fastening Systems segment produces aerospace fastening systems, as well as commercial transportation, industrial, and other fasteners. The Engineered Structures segment provides titanium ingots and mill products for aerospace and defense applications; and aluminum and nickel forgings, and machined components and assemblies. The Forged Wheels segment offers forged aluminum wheels and related products for heavy-duty trucks and commercial transportation markets. The company was formerly known as Arconic Inc. The company was founded in 1888 and is based in Pittsburgh, Pennsylvania.
How the Company Makes MoneyHowmet Aerospace makes money through the design, manufacture, and sale of its highly specialized products, primarily serving the aerospace and transportation industries. The company's revenue model revolves around producing components for jet engines, aircraft structures, industrial gas turbines, and commercial vehicle wheels. Key revenue streams include contracts with major aerospace manufacturers like Boeing and Airbus, sales to defense contractors, and partnerships with automotive companies. Howmet Aerospace benefits from long-term agreements and recurring sales due to the demand for replacement parts and the high entry barriers in its specialized markets. Additionally, the company invests in research and development to innovate and maintain its competitive edge, further supporting its earnings.
Howmet Aerospace Key Performance Indicators (KPIs)
Any
Adjusted EBITDA by Segment
Shows profitability from each business segment, highlighting which areas are most financially efficient and contributing to overall earnings strength.
Shows profitability from each business segment, highlighting which areas are most financially efficient and contributing to overall earnings strength.
Data provided by:
Main Street Data
Main Street DataHowmet Aerospace Financial Statement Overview
Summary
Howmet Aerospace exhibits strong financial performance with significant revenue growth and enhanced profit margins. The balance sheet shows improved leverage with a strong equity base, and cash flow statements reflect strong cash generation and effective capital management. Continued focus on managing debts and capital expenditures is essential.Income Statement
Howmet Aerospace has demonstrated strong revenue growth, with a steady increase from $4,972M in 2021 to $7,548M TTM. Gross profit margin has improved significantly, reaching 47.5% TTM, up from 27.7% in 2020. The net profit margin has also strengthened to 16.6% TTM, indicating enhanced profitability. EBIT and EBITDA margins are solid at 23.6% and 26.2% TTM respectively, showcasing operational efficiency. However, the company must continue to manage costs effectively to maintain these margins.85
Very Positive
Balance Sheet
The company's balance sheet reflects a stable financial position with an equity ratio of 44.5% TTM, indicating a strong equity base. The debt-to-equity ratio has improved to 0.69 TTM, down from 1.42 in 2020, suggesting effective debt management. Return on equity is robust at 26.2% TTM, highlighting efficient use of equity to generate profits. However, total debt remains significant, requiring careful monitoring to avoid potential leverage risks.78
Positive
Cash Flow
Operating cash flow has grown steadily, reaching $1,374M TTM, indicating strong cash generation from operations. Free cash flow has also improved to $1,016M TTM, reflecting effective capital expenditure management. The operating cash flow to net income ratio is favorable at 1.09 TTM, showing solid cash conversion. Despite positive cash flow trends, monitoring capital expenditures will be crucial to sustaining free cash flow growth.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 7.43B | 6.64B | 5.66B | 4.97B | 5.26B | Gross Profit |
| 2.31B | 1.87B | 1.56B | 1.38B | 1.38B | EBIT |
| 1.63B | 1.20B | 919.00M | 748.00M | 626.00M | EBITDA |
| 1.84B | 1.47B | 1.26B | 1.09B | 831.00M | Net Income Common Stockholders |
| 1.16B | 765.00M | 469.00M | 258.00M | 261.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 564.00M | 610.00M | 791.00M | 720.00M | 1.61B | Total Assets |
| 10.52B | 10.43B | 10.26B | 10.22B | 11.45B | Total Debt |
| 3.47B | 3.83B | 4.16B | 4.23B | 5.08B | Net Debt |
| 2.91B | 3.23B | 3.37B | 3.51B | 3.46B | Total Liabilities |
| 5.96B | 6.39B | 6.65B | 6.71B | 7.87B | Stockholders Equity |
| 4.55B | 4.04B | 3.60B | 3.51B | 3.58B |
| Cash Flow | Free Cash Flow | |||
| 977.00M | 682.00M | 540.00M | 250.00M | -258.00M | Operating Cash Flow |
| 1.30B | 901.00M | 733.00M | 449.00M | 9.00M | Investing Cash Flow |
| -316.00M | -215.00M | -135.00M | 107.00M | 271.00M | Financing Cash Flow |
| -1.03B | -868.00M | -526.00M | -1.44B | -369.00M |
Howmet Aerospace Technical Analysis
Positive
154.07
Price Trends
129.47
Positive
124.93
Positive
112.42
Positive
Market Momentum
4.80
Negative
73.24
Negative
95.23
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HWM, the sentiment is Positive. The current price of 154.07 is above the 20-day moving average (MA) of 128.85, above the 50-day MA of 129.47, and above the 200-day MA of 112.42, indicating a bullish trend. The MACD of 4.80 indicates Negative momentum. The RSI at 73.24 is Negative, neither overbought nor oversold. The STOCH value of 95.23 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HWM.
Howmet Aerospace Risk Analysis
Howmet Aerospace disclosed 28 risk factors in its most recent earnings report. Howmet Aerospace reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Howmet Aerospace Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $59.87B | 52.64 | 28.29% | 0.21% | 10.01% | 47.99% | |
76 Outperform | $22.22B | 8.34 | 17.45% | 1.21% | -5.86% | 59.79% | |
76 Outperform | $79.71B | 25.61 | 27.16% | 1.07% | -0.23% | 22.41% | |
74 Outperform | $41.30B | 10.57 | 41.27% | 2.42% | 0.14% | 444.36% | |
74 Outperform | $71.00B | 20.69 | 107.62% | 2.47% | -1.85% | 12.04% | |
71 Outperform | $38.41B | 23.87 | -33.93% | 1.62% | -0.88% | 9.98% | |
64 Neutral | $4.28B | 11.80 | 5.30% | 250.74% | 4.12% | -9.02% |
* Industrials Sector Average
Performance Comparison
HWM
Howmet Aerospace
154.07
74.13
92.73%
CMI
Cummins
299.85
22.30
8.03%
DOV
Dover
173.87
-5.92
-3.29%
ITW
Illinois Tool Works
242.32
2.86
1.19%
PH
Parker Hannifin
619.02
73.95
13.57%
OTIS
Otis Worldwide
97.32
5.72
6.24%
Howmet Aerospace Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q1-2025)
| % Change Since: 11.18%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Positive
The earnings call highlighted record-breaking revenue and growth, strong performance across segments, and significant improvements in margins and shareholder returns. However, challenges in commercial transportation, declines in Forged Wheels revenue, and impacts of tariffs and delayed aircraft production were noted. Despite these challenges, the overall sentiment is positive due to the strong financial performance and strategic achievements.Q1-2025 Updates
Positive Updates
Record-Breaking Revenue and Growth
Q1 2025 revenue was a record, increasing 6% year-over-year. EBITDA margin was 28.8%, and operating margin increased by 500 basis points year-over-year to 25.3%.
Strong Performance Across Segments
All segments grew in revenue and EBITDA compared to Q4 2024. Notable margin progression was seen in Fastening Systems and Structures.
Commercial and Defense Aerospace Growth
Commercial Aerospace revenue increased 9% year-over-year, with Defense Aerospace up 19%. Engine spares demand was a key driver.
Free Cash Flow and Shareholder Returns
Free cash flow was a record $134 million in Q1 2025. A 25% increase in dividends and $125 million in share buybacks were executed in Q1, with an additional $100 million in April.
Credit Rating Upgrade
Fitch upgraded Howmet's credit rating from BBB to BBB+, reflecting improved financial leverage and strong cash generation.
Significant Margin Improvement
EBITDA margin increased 480 basis points to 28.8%. Earnings per share increased by 51% year-over-year to $0.86.
Environmental, Social, and Governance (ESG) Progress
Howmet achieved a 21.7% reduction in greenhouse gas emissions versus a 2019 baseline, meeting its three-year target.
Negative Updates
Commercial Transportation Revenue Decline
Commercial Transportation revenue decreased 14% in Q1 2025, continuing to face challenges despite outperforming the market with premium products.
Forged Wheels Revenue and EBITDA Decline
Forged Wheels revenue was down 13% year-over-year, with EBITDA decreasing 17%. This was attributed to challenging market conditions.
Impact of Tariffs and Economic Uncertainty
Tariffs have increased uncertainty and reduced confidence in air travel. The net impact of tariffs is expected to be less than $15 million in 2025.
Delayed Wide-Body Aircraft Ramp
The ramp-up of the Boeing 787 production was delayed, causing some perturbation in the first half of the year.
Company Guidance
During Howmet Aerospace's first quarter 2025 earnings call, the company reported a strong start to the fiscal year with record revenue up 6% and an EBITDA margin of 28.8%. Operating margin increased by 500 basis points year-over-year to 25.3%, and free cash flow was a positive $134 million. Commercial Aerospace revenue grew by 9%, Defense Aerospace by 19%, and the industrial and other markets by 10%, while Commercial Transportation revenue declined by 14%. Fastening Systems showed notable margin progression, and share buybacks of $125 million in Q1 were complemented by a further $100 million in April. The company expects Q2 revenue of $1.99 billion and a full-year revenue midpoint of $8.03 billion, with increased guidance for EBITDA and earnings per share. Despite uncertainties related to tariffs and economic conditions, Howmet remains confident in its growth outlook, supported by strong spares demand and continued investments in capacity expansion.Howmet Aerospace Corporate Events
Business Operations and StrategyFinancial Disclosures
Howmet Aerospace Releases 2024 Annual and ESG Reports
Neutral
Apr 16, 2025
On April 16, 2025, Howmet Aerospace Inc. released its 2024 Annual Report and Environmental, Social and Governance (ESG) Report on its website. The Annual Report, which includes a letter from the Executive Chairman and CEO, highlights the company’s achievements in 2024 and provides a market outlook for 2025. The ESG Report details Howmet’s commitment to environmental, social, and governance performance, underscoring its dedication to sustainable practices.
Spark’s Take on HWM Stock
According to Spark, TipRanks’ AI Analyst, HWM is a Outperform.
Howmet Aerospace’s strong financial performance and positive earnings call outlook are significant strengths, contributing to a robust overall score. However, the technical indicators suggest potential short-term volatility, and the high valuation may deter value investors. These factors are balanced to arrive at a sound stock score.
To see Spark’s full report on HWM stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.