Can Howmet Sustain Growth as Defense Aerospace Demand Surges?

Core Insights - Howmet Aerospace Inc.'s defense aerospace market is a significant growth driver, with revenues from this segment accounting for 17% of total sales in Q2 2025, reflecting a 21% year-over-year increase [1][8] - The demand for engine spares, particularly for the F-35 program, and increased orders for fighter jet parts are key contributors to this revenue surge [1][8] - The Engineered Structures segment reported a 5% year-over-year revenue increase, supported by a strong pipeline of military aircraft programs and a robust defense budget [2] Financial Performance - The House of Representatives passed the fiscal year 2026 Defense Appropriations Act, allocating $831.5 billion, which is expected to benefit Howmet's defense business and boost its top line [3] - The Zacks Consensus Estimate for revenues from the defense aerospace market in Q3 2025 is projected at $351 million, indicating a 21.5% year-over-year increase [4] - Howmet's shares have surged 98.9% over the past year, outperforming the industry growth of 24.4% [7] Competitive Landscape - GE Aerospace's Defense & Propulsion Technologies business is also experiencing growth due to rising demand for advanced propulsion systems, securing a $5 billion contract from the U.S. Air Force [5] - Textron Inc.'s defense business is gaining momentum with key U.S. military contracts, including a contract with the Tunisian Air Force for 12 SUBARU Bell 412EPXs [6] Valuation and Estimates - Howmet is trading at a forward price-to-earnings ratio of 48.52X, above the industry average of 29.55X, with a Value Score of B [9] - The Zacks Consensus Estimate for Howmet's 2025 earnings has increased by 0.3% over the past 60 days [10]