Core Insights - Howmet Aerospace Inc. (HWM) has shown consistent margin expansion, with adjusted EBITDA margins increasing from 26.5% in Q3 2024 to 28.7% in Q2 2025, reflecting a 300 basis point year-over-year improvement [1][8] Financial Performance - In Q2 2025, HWM's cost of goods sold rose by 6.1% year-over-year, but a significant 8.2% reduction in SG&A expenses helped maintain profitability [2] - The adjusted EBITDA margins for HWM's segments were as follows: Engine Products (up 200 basis points), Fastening Systems (up 360 basis points), and Engineered Structures (up 690 basis points), driven by manufacturing optimization and improved product mix [2] - HWM has raised its 2025 adjusted EBITDA margin guidance to a range of 28.5% to 28.6%, up from the previous estimate of 27.8% to 28.2%, indicating strong confidence in sustained performance [4] Market Dynamics - Strong demand in both commercial and defense aerospace markets is positively impacting HWM's performance, particularly with robust orders for F-35 engine spares and aerospace fastening systems [3] Peer Comparison - RTX Corporation's total costs increased by 6.4% year-over-year to $19.48 billion in Q2 2025, with an adjusted operating profit of $2.79 billion [5] - GE Aerospace experienced a 22.8% surge in cost of sales year-over-year in Q2 2025, but its adjusted operating profit rose by 23% [6] Stock Performance and Valuation - HWM's shares have increased by 95.1% over the past year, significantly outperforming the industry average growth of 16% [7] - The company is currently trading at a forward price-to-earnings ratio of 45.59X, which is above the industry average of 27.64X [10] Earnings Estimates - The Zacks Consensus Estimate for HWM's earnings has been rising over the past 60 days, with current estimates for the current quarter at $0.90 and for the next year at $4.28 [12]
Can Howmet Aerospace Maintain Its EBITDA Margin Expansion Streak?