Howmet Aerospace: Navigating Trends in a Competitive Market
Howmet Aerospace Inc. (HWM), based in Pittsburgh, Pennsylvania, is a leader in providing advanced engineered solutions tailored for the aerospace and transportation sectors. With a market capitalization of $43.8 billion, the company specializes in products such as engines, fasteners, structures, and forged wheels.
HWM aligns with the definition of “large-cap stocks,” boasting a market cap that reinforces its significant role in the aerospace and defense industry. Its expertise in lightweight metals engineering has established HWM as a key supplier for aircraft engines and turbines. Through innovative products like advanced airfoils and specialized fasteners, it consistently meets the demanding standards essential for aerospace performance and efficiency.
However, HWM recently experienced a 9.4% decline from its 52-week high of $120.71, reached on December 6. In contrast, the stock has climbed 12.2% over the last three months, outperforming the Industrial Select Sector SPDR Fund (XLI), which has reported a 1.4% decrease in that period.
Looking at a broader timeline, HWM shares have surged 102.1% year-to-date (YTD) and increased 103.8% over the past year, significantly outperforming XLI’s YTD gains of 16% and its 16.8% increase over the last year.
HWM has maintained a trading position above its 200-day moving average throughout the year, signaling a positive trend. Yet, it has recently fluctuated below its 50-day moving average despite a steady upward price trend earlier in the year.
The company attributes its solid performance to a revitalized commercial aerospace market, fueled by rising air travel and heightened demand for aircraft. Increased spending on aircraft parts and the push for more fuel-efficient, eco-friendly aircraft have proven beneficial. Moreover, the defense sector remains strong, buoyed by consistent government support and a growing defense budget, positioning Howmet for significant growth opportunities.
Following the release of its Q3 results on November 6, HWM shares surged more than 12%. The company’s adjusted earnings per share (EPS) reported at $0.71 exceeded analyst expectations of $0.65. However, its revenue of $1.8 billion fell short of the Wall Street forecast of $1.9 billion. Looking ahead, HWM anticipates an adjusted EPS between $0.70 and $0.72 for Q4, alongside projected revenue of $1.85 billion to $1.89 billion.
In comparison, HWM’s competitor, TransDigm Group Incorporated (TDG), has shown a YTD increase of 24.6% and a 26.2% rise over the past year, lagging behind HWM’s performance.
Analysts on Wall Street maintain a positive outlook for HWM, awarding it a consensus “Strong Buy” rating based on insights from 21 analysts. The average price target stands at $123.09, suggesting a potential upside of 12.6% from current market levels.
On the date of publication,
Neha Panjwani
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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
