Core Viewpoint - Howmet (NYSE:HWM) reported strong earnings for 2Q24, with a 14% year-over-year revenue growth primarily driven by the commercial aerospace market, which constitutes about 52% of total revenue [2][8][14] Financial Performance - Revenue for 2Q24 increased by 14% year-over-year, with commercial aerospace growing 27% year-over-year and defense aerospace increasing 11% year-over-year [8][14] - Adjusted operating income margin expanded from 18.3% to 22%, while adjusted EBITDA increased by 31% year-over-year to $483 million, resulting in an adjusted EBITDA margin rise from 22.3% to 25.7% [9][14] - Adjusted EPS rose 52% year-over-year from $0.44 to $0.67 [9][14] Market Dynamics - The commercial aerospace market is crucial for HWM, accounting for over half of its revenue, and is supported by strong air travel demand, particularly in the Asia-Pacific region, where international travel has grown by about 20% [6][14] - Data from the International Civil Aviation Organisation indicates that both revenue passenger kilometres (RPK) and available seat kilometres (ASK) have increased compared to June 2019, with ASK up 7.7% and RPK up 1.8% [6][8] Segment Performance - HWM's engine products segment, which accounts for 49% of total revenue, reported a 14% year-over-year revenue increase, driven by growth in commercial aerospace and defense aerospace [5][10] - The fastening systems segment grew by 20%, and engineered structures increased by 38%, while the forged wheels segment saw a decline of 4% [9] Outlook and Guidance - HWM's guidance for FY2024 includes revenue estimates between $7.4 billion and $7.48 billion, with adjusted EBITDA forecasted to be in the range of $1.855 billion to $1.875 billion, implying an adjusted EBITDA margin of approximately 25.1% [11] - The company has increased its expectations for Boeing's 737 aircraft build rate from 20 to 22 aircraft per month, reflecting optimism despite ongoing production challenges at Boeing [7][14] Relative Valuation - HWM's forward revenue growth rate is 12.91%, outperforming the peers' median of 10.96%, and its EBITDA margin TTM is 23.47%, significantly higher than the peers' median of 12.88% [11] - HWM's current forward non-GAAP P/E ratio is 36.22x, above the peers' median of 27.90x, justified by its strong growth and profitability metrics [11]

Thomas Barwick Investment overview I give a hold rating to Howmet Aerospace (NYSE:HWM). I am bullish on the fundamentals of the business, given the strong underlying secular tailwinds and the potential for enhanced capital returns. However, the stock is trading at a high valuation, which provides little margin of safety to investors today. Hence, I believe investors should wait for a better entry point. Business description HWM is in the business of providing engineered solutions for the aerospace and trans ...

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Howmet (HWM) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company. The upward trend in estimate revisions for this maker of engineered products for the aerospace and other industries reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical ...

Howmet (HWM) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices. The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system. The power of ...

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Group 1 - Howmet (HWM) is a notable stock within the Construction sector, which ranks 4 among 16 groups in the Zacks Sector Rank [2] - HWM has achieved a year-to-date gain of approximately 75.3%, significantly outperforming the average gain of 16.4% for Construction stocks [4] - The Zacks Consensus Estimate for HWM's full-year earnings has increased by 9.5% over the past quarter, indicating a positive trend in analyst sentiment [3] Group 2 - Howmet is part of the Engineering - R and D Services industry, which ranks 90 among 20 individual stocks, and has gained an average of 26.5% this year [5] - Advanced Drainage Systems (WMS) is another Construction stock that has outperformed the sector with a year-to-date increase of 20.3% [4] - The consensus EPS estimate for Advanced Drainage Systems has risen by 7.3% over the past three months, and it currently holds a Zacks Rank of 1 (Strong Buy) [5]

This aerospace and defense supplier continues to exceed expectations. Howmet Aerospace (HWM -0.87%) stock is up a whopping 75% in 2024 and rose 14.7% in the last week to Friday morning trading. The latest leg up is due to its impressive second-quarter earnings release earlier this week. Howmet's end markets The company generates around 52% of its sales from commercial aerospace and 16% from defense aerospace, with commercial transportation at about 18%. The remaining 14% is under the "industrial and other" ...

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Core Insights - Howmet (HWM) reported revenue of $1.88 billion for the quarter ended June 2024, reflecting a year-over-year increase of 14.1% and an EPS of $0.67 compared to $0.44 a year ago [13]. Revenue Performance - Total Sales for Engine Products reached $394 million, exceeding the average estimate of $381.50 million by three analysts, representing a year-over-year change of +19.8% [14]. - Total Sales for Forged Wheels amounted to $40 million, surpassing the average estimate of $36.64 million by three analysts [5]. - Total Sales for Fastening Systems was reported at $278 million, slightly below the three-analyst average estimate of $287.15 million, indicating a year-over-year decline of -6.7% [15]. - Total Sales for Engineered Structures reached $290 million, exceeding the average estimate of $286.49 million by two analysts, representing a year-over-year increase of +10.7% [23]. End Market Revenue - End Market Revenue for Aerospace - Commercial was reported at $265 million, slightly below the average estimate of $267.08 million, reflecting a year-over-year increase of +3.9% [4]. - End Market Revenue for Aerospace - Defense was $346 million, which is below the two-analyst average estimate of $350.19 million, showing a year-over-year decline of -3.9% [10]. - End Market Revenue for Industrial and Other was reported at $292 million, exceeding the average estimate of $258.58 million by three analysts [25]. Adjusted EBITDA - Adjusted EBITDA for Engine Products was $75 million, below the average estimate of $79.63 million based on three analysts [11]. - Adjusted EBITDA for Forged Wheels was reported at $40 million, exceeding the average estimate of $36.64 million [5]. - Adjusted EBITDA for Engineered Structures reached $101 million, surpassing the three-analyst average estimate of $90.88 million [26]. Stock Performance - Shares of Howmet have returned +7.2% over the past month, outperforming the Zacks S&P 500 composite's +0.1% change, with a current Zacks Rank 3 (Hold) indicating potential performance in line with the broader market [21].