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Howmet Soars 96.1% in the Past Year: Should Investors Ride the Rally?
HWMHowmet Aerospace(HWM) ZACKS·2025-04-16 16:20

Company Performance - Howmet Aerospace Inc. (HWM) shares have surged 96.1% in the past year, significantly outperforming the industry and the S&P 500, which returned 4.9% and 8.1%, respectively [1] - The stock closed at 124.47,tradingbelowits52−weekhighof124.47, trading below its 52-week high of 140.55 but above its 52-week low of 62.80,indicatingsolidupwardmomentumandpricestability[3]MarketDrivers−ThecommercialaerospacemarketisthestrongestdriverofHowmet′sbusiness,withairtraveldemandcontinuingtorisethrough2024,particularlyforwide−bodyaircraft[5][8]−Revenuesfromthecommercialaerospacemarketincreased12.962.80, indicating solid upward momentum and price stability [3] Market Drivers - The commercial aerospace market is the strongest driver of Howmet's business, with air travel demand continuing to rise through 2024, particularly for wide-body aircraft [5][8] - Revenues from the commercial aerospace market increased 12.9% year over year in Q4 2024, constituting 53% of Howmet's business, driven by demand for new, fuel-efficient aircraft [9] - The defense business is also experiencing positive momentum, with revenues increasing 22% year over year in Q4, making up 16% of the company's business [10] Financial Outlook - Howmet expects to generate revenues in the range of 7.93-8.13billionin2025,indicatingyear−over−yeargrowthof88.13 billion in 2025, indicating year-over-year growth of 8% at the midpoint [12] - The Zacks Consensus Estimate for Howmet's 2025 earnings has increased 1.6% to 3.25 per share, reflecting a year-over-year growth of 20.8% [16] Shareholder Returns - Howmet is committed to rewarding shareholders, having paid dividends worth 109millionandrepurchasedsharesfor109 million and repurchased shares for 500 million in 2024 [13] - In January 2025, the company increased its dividend by 25% to 10 cents per share, and in July 2024, it approved an increase in the share repurchase program by $2 billion [13] Competitive Landscape - Howmet operates in a highly competitive aerospace and defense market, with peers like GE Aerospace and Textron also being significant players [15] - The company faces near-term concerns due to weakness in the commercial transportation market and production issues at Boeing [14]