With a market capitalization of $51.2 billion, Howmet Aerospace Inc. (HWM) is a leading provider of precision-engineered solutions for the aerospace and transportation sectors. the company, based in Pittsburgh, Pennsylvania, specializes in advanced engine components, fasteners, structural systems, and high-performance forged wheels, catering to both commercial and defense applications.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and HWM perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the aerospace & defense industry. Rising geopolitical tensions and higher global defense budgets have further bolstered demand for aerospace components, positioning Howmet as a key supplier in the sector.
HWM leverages its expertise in precision engineering to maintain a strong competitive edge in the aerospace and transportation industries. Its strengths include a dominant position in jet engine components, high-performance fasteners, and structural systems, supported by advanced manufacturing capabilities. The company benefits from long-term contracts with major aerospace and defense firms, ensuring steady demand.
Despite its notable strength, the defense titan has slipped 8% from its 52-week high of $140.55, achieved on Feb. 19. Over the past three months, HWM stock has gained 15.5%, outperforming the SPDR S&P Aerospace & Defense ETF (XAR), which has dropped 3.3% during the same timeframe.
Over the past six months, shares of HWM rose 36.7% and climbed 95.2% over the past 52 weeks, outpacing XAR’s six-month gains of 7.7% and 19.3% returns over the last year.
To confirm the bullish trend, HWM has been majorly trading above its 50-day and 200-day moving averages over the past year.
While the commercial aerospace market has been the primary growth driver for Howmet, the defense sector has also gained traction, supported by consistent government spending and increased military demand. The company has secured robust orders for critical engine components and fasteners, particularly for key defense programs such as the F-35 fighter jet and other legacy aircraft.
On Feb. 13, HWM unveiled its fourth-quarter earnings, and its shares jumped more than 8% in the next three trading sessions. The company posted impressive results, exceeding expectations with a 9% year-over-year revenue increase to $1.9 billion and a 33% rise in net profit to $314 million. Adjusted EPS soared 40% from the prior-year quarter to $0.74, fueled by strong demand across commercial and defense aerospace.
HWM’s key rival, TransDigm Group Incorporated (TDG), has lagged behind the stock, with a 1.2% dip over the past six months and 15.9% gains over the past 52 weeks.
Wall Street analysts are very bullish on HWM’s prospects. The stock has a consensus “Strong Buy” rating from the 21 analysts covering it, and the mean price target of $138.73 suggests a potential upside of 7.3% from current price levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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