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 and increasing by 24% year over year in Q3 2025 [1][8] - The Engineered Structures segment reported a 14% year-over-year revenue increase, supported by strong orders for military aircraft spares [2][8] - The House of Representatives passed the FY 2026 Defense Appropriations Act, allocating $831.5 billion, which is expected to enhance Howmet's ability to secure new contracts [3][4] Revenue and Growth - The defense aerospace market's robust performance is attributed to strong orders for engine spares for the F-35 program and legacy fighters like the F-15 and F-16 [1][8] - Howmet is well-positioned for continued demand growth due to a solid pipeline of military aircraft programs [2][4] Competitive Landscape - Textron Inc.'s defense business is gaining momentum with key U.S. military contracts, including a recent contract for Bell 429 helicopters [5] - GE Aerospace's Defense & Propulsion Technologies business is benefiting from rising demand, securing a $5 billion contract from the U.S. Air Force [6] Stock Performance and Valuation - Howmet's shares have increased by 13.7% over the past three months, contrasting with a 3.2% decline in the industry [7] - The company is trading at a forward price-to-earnings ratio of 46.06X, above the industry average of 28.56X, and carries a Value Score of D [9] Earnings Estimates - The Zacks Consensus Estimate for Howmet's 2025 earnings has risen by 2.8% over the past 30 days [10]

Core Viewpoint - Howmet Aerospace Inc. (HWM) is experiencing significant growth driven by strong demand in the defense aerospace market, which is becoming a crucial growth pillar alongside the commercial aerospace sector [1][4]. Financial Performance - In Q2 2025, revenues from the defense aerospace market increased by 21% year over year, contributing to 17% of HWM's total sales, following a 19% increase in Q1 [2]. - The Engineered Structures segment saw a revenue rise of 5.5% year over year, while the Engine Products segment reported a 13.2% year-over-year revenue increase in Q2 [2]. Market Environment - The House of Representatives passed the fiscal year 2026 Defense Appropriations Act, allocating $831.5 billion, which is expected to enhance HWM's ability to secure more defense contracts [3]. - Despite challenges such as tariffs and inflation, the defense aerospace market is providing a stable foundation for HWM, with strong momentum in the F-35 program [4]. Competitive Landscape - Textron Inc. is gaining traction in the defense sector, securing contracts with the U.S. military, including a recent contract with the Tunisian Air Force [5]. - GE Aerospace's Defense & Propulsion Technologies is also benefiting from increased demand, securing a $5 billion contract from the U.S. Air Force for F110 engines [6]. Stock Performance and Valuation - HWM's shares have surged by 88.4% over the past year, significantly outperforming the industry growth of 12.5% [9]. - HWM is trading at a forward price-to-earnings ratio of 47.01X, above the industry average of 28.28X, and carries a Value Score of D [10]. - The Zacks Consensus Estimate for HWM's earnings has been increasing over the past 60 days, with current estimates for Q3 2025 at $0.90 and for the current year at $3.57 [11][12].