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1. Company Snapshot

1.a. Company Description

Howmet Aerospace Inc.provides advanced engineered solutions for the aerospace and transportation industries in the United States, Japan, France, Germany, the United Kingdom, Mexico, Italy, Canada, Poland, China, and internationally.It operates through four segments: Engine Products, Fastening Systems, Engineered Structures, and Forged Wheels.


The Engine Products segment offers airfoils and seamless rolled rings primarily for aircraft engines and industrial gas turbines; and rotating parts, as well as structural parts.The Fastening Systems segment produces aerospace fastening systems, as well as commercial transportation, industrial, and other fasteners.The Engineered Structures segment provides titanium ingots and mill products for aerospace and defense applications; and aluminum and nickel forgings, and machined components and assemblies.


The Forged Wheels segment offers forged aluminum wheels and related products for heavy-duty trucks and commercial transportation markets.The company was formerly known as Arconic Inc.The company was founded in 1888 and is based in Pittsburgh, Pennsylvania.

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1.b. Last Insights on HWM

Howmet Aerospace's recent performance was driven by strong Q4 earnings and revenue growth, fueled by surging aerospace demand. The company's Q4 revenue reached $2.17 billion, up 15% year-over-year, with EBITDA rising 29% to $653 million. Its earnings per share also beat estimates, coming in at $1.05 versus the expected $0.97. The company raised its 2026 guidance, citing continued growth momentum. Institutional investors, such as Fisher Asset Management and Contravisory Investment Management, have been increasing their stakes in the company.

1.c. Company Highlights

2. Howmet Aerospace Shines with Strong Q4 and Full-Year 2025 Results

Howmet Aerospace reported a robust Q4 and full-year 2025, with revenue increasing 15% to $2.17 billion and 11% to $8.34 billion, respectively. EBITDA saw a significant jump of 29% to $653 million and 26% to $2.42 billion, respectively. Earnings per share were $1.05, up 42%, and $3.77, up 40%, respectively, beating analyst estimates of $0.965. The company's free cash flow conversion was impressive at 93% of net income, totaling $1.43 billion.

Publication Date: Feb -13

📋 Highlights
  • Revenue Growth:: Q4 revenue rose 15% to $2.17B; full-year revenue increased 11% to $8.34B, driven by 20% growth in defense and 32% in gas turbine segments.
  • EBITDA & Profit Margins:: Q4 EBITDA surged 29% to $653M; full-year EBITDA reached $2.42B, with a record 34% EBITDA margin.
  • Free Cash Flow Strength:: Generated $1.43B in free cash flow in 2025, with 93% conversion of net income to cash.
  • Capital Deployment:: $470M in 2026 CapEx planned, plus $1.8B acquisition in aerospace fasteners, aligning with growth in commercial aerospace and defense.
  • Spares Segment Expansion:: Spares revenue grew over 30% in 2025, including 40%+ growth in commercial aerospace spares, expected to drive 2026 performance.

Segment Performance

The Engine Products segment achieved a record quarter, with revenue rising 20% to $1.16 billion and EBITDA increasing 31% to $396 million. The Fastening Systems segment also had a strong quarter, with revenue up 13% to $454 million and EBITDA growing 25% to $139 million. Engineered Structures and Forged Wheels saw revenue increases of 4% to $287 million and 9% to $272 million, respectively, with EBITDA margins expanding in both segments.

Growth Drivers and Outlook

Revenue growth was primarily driven by commercial aerospace, up 13% in Q4 and 12% for the full year, and defense aerospace, up 20% in Q4 and 21% for the full year. The company expects continued strong growth in these segments, along with gas turbines, in 2026. Howmet has guided for revenue of $9.1 billion, EBITDA of $2.76 billion, and earnings per share of $4.45.

Valuation and Return Metrics

With a P/E Ratio of 68.03 and EV/EBITDA of 45.14, the market appears to be pricing in significant growth expectations. Return metrics, such as ROIC at 16.93% and ROE at 29.7%, indicate strong profitability. The Net Debt / EBITDA ratio improved to 1.13, reflecting the company's robust cash generation and reduced debt.

Capital Deployment and M&A

Howmet is actively deploying capital towards growth opportunities, including increased CapEx, acquisitions, and share buybacks. The company has made significant acquisitions, including one for $1.8 billion in the Aerospace fastener and fittings business, to strengthen its portfolio and drive future growth.

Future Prospects

The company's spares business is expected to continue growing, potentially becoming a larger portion of its overall revenue. With a strong balance sheet and robust cash generation, Howmet is well-positioned to capitalize on growth opportunities in commercial aerospace, defense, and gas turbines.

3. NewsRoom

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Howmet Aerospace and GE Vernova Stocks Are Up Big in 2026, Extending Massive Rallies

Mar -10

Source: 247wallst.com

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Rep. Byron Donalds Sells Brown & Brown, Inc. (NYSE:BRO) Stock

Mar -10

Source: defenseworld.net

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Rep. Byron Donalds Purchases Shares of ServiceNow, Inc. (NYSE:NOW)

Mar -10

Source: defenseworld.net

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PayPal (NASDAQ:PYPL) Shares Unloaded Rep. Byron Donalds

Mar -10

Source: defenseworld.net

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Rep. Byron Donalds Purchases Shares of The Trade Desk (NASDAQ:TTD)

Mar -10

Source: defenseworld.net

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Options Trading Signal: Aerospace Stock Could See More Records

Mar -09

Source: schaeffersresearch.com

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Howmet Aerospace Inc. $HWM Shares Sold by Fisher Asset Management LLC

Mar -08

Source: defenseworld.net

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Howmet Gains From Strength in Commercial Aerospace: Will the Momentum Last?

Mar -06

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.76%)

6. Segments

Engine Products

Expected Growth: 9.5%

The 9.5% growth in Engine Products from Howmet Aerospace Inc. is driven by increasing demand for commercial aerospace engines, recovery in industrial gas turbine demand, and market share gains. Additionally, the company's focus on innovative products and services, such as advanced materials and 3D printing, contributes to its growth momentum.

Fastening Systems

Expected Growth: 10.2%

The 10.2% growth in Fastening Systems from Howmet Aerospace Inc. is driven by increasing demand for lightweight and advanced materials in commercial aerospace, recovery in defense spending, and growth in the aftermarket segment. Additionally, Howmet's focus on innovation and strategic acquisitions have contributed to its strong performance.

Engineered Structures

Expected Growth: 8.8%

The 8.8% growth in Engineered Structures from Howmet Aerospace Inc. is driven by increasing demand for lightweight, high-strength components in the aerospace and defense industries. Key factors include rising commercial aircraft production, growing aftermarket services, and the company's expanding capabilities in advanced materials and manufacturing technologies.

Forged Wheels

Expected Growth: 11.0%

The 11.0% growth in Forged Wheels from Howmet Aerospace Inc. is driven by increasing demand for lightweight, high-strength wheels in the aerospace and defense industries. Additionally, the company's innovative manufacturing processes and strategic partnerships with major aircraft producers contribute to its growth, enabling it to capitalize on the trend towards more fuel-efficient and sustainable aircraft designs.

Inter-Segment Sales

Expected Growth: 9.0%

Inter-Segment Sales growth of 9.0% for Howmet Aerospace Inc. is driven by increased demand for engineered materials and precision components across segments, favorable pricing, and efficient supply chain management. This growth reflects strong intersegment collaboration and synergies within the company, likely driven by aerospace and defense sector recovery and growth in commercial aerospace.

7. Detailed Products

Engine Components

High-performance, precision-engineered components for jet engines, including turbine blades, vanes, and other critical parts

Fastening Systems

High-strength, precision-engineered fasteners and related products, including bolts, nuts, and pins

Rotating Components

High-performance, precision-engineered rotating components, including engine bearings, shafts, and gears

Aerostructures

Engineered structures and components for aircraft and spacecraft, including fuselage sections, wing components, and satellite parts

Additive Manufacturing

3D-printed metal components and parts, including complex geometries and customized designs

8. Howmet Aerospace Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Howmet Aerospace Inc. operates in the aerospace and industrial gas turbine industries, where substitutes are limited due to the high specificity and customization of its products. The company's products are often critical components in aircraft and gas turbines, making substitution difficult.

Bargaining Power Of Customers

Howmet Aerospace Inc.'s customers, primarily large aerospace and industrial gas turbine manufacturers, have some bargaining power due to their significant order volumes. However, the company's products are critical to their operations, which somewhat limits customer bargaining power.

Bargaining Power Of Suppliers

Howmet Aerospace Inc. likely has a diverse supplier base and may have some flexibility in sourcing materials. The company may also have significant negotiating power due to its large order volumes and long-term supplier relationships.

Threat Of New Entrants

The aerospace and industrial gas turbine industries have significant barriers to entry, including high capital requirements, stringent regulatory requirements, and the need for specialized expertise. This limits the threat of new entrants.

Intensity Of Rivalry

The aerospace and industrial gas turbine industries are highly competitive, with several established players. However, Howmet Aerospace Inc. has a strong market position and a diversified product portfolio, which somewhat mitigates the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 43.25%
Debt Cost 6.28%
Equity Weight 56.75%
Equity Cost 10.87%
WACC 8.89%
Leverage 76.22%

11. Quality Control: Howmet Aerospace Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Xylem

A-Score: 5.6/10

Value: 2.3

Growth: 5.6

Quality: 6.7

Yield: 2.0

Momentum: 7.5

Volatility: 9.3

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AMETEK

A-Score: 5.3/10

Value: 1.8

Growth: 5.8

Quality: 7.7

Yield: 1.0

Momentum: 6.0

Volatility: 9.3

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Howmet Aerospace

A-Score: 5.1/10

Value: 0.0

Growth: 6.8

Quality: 6.7

Yield: 0.0

Momentum: 9.5

Volatility: 7.7

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Otis

A-Score: 5.1/10

Value: 4.4

Growth: 4.4

Quality: 5.5

Yield: 3.0

Momentum: 4.0

Volatility: 9.0

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Roper Technologies

A-Score: 5.0/10

Value: 3.0

Growth: 5.6

Quality: 7.4

Yield: 1.0

Momentum: 3.0

Volatility: 10.0

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Ingersoll Rand

A-Score: 4.2/10

Value: 2.1

Growth: 7.4

Quality: 6.0

Yield: 0.0

Momentum: 2.5

Volatility: 7.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

251.65$

Current Price

251.65$

Potential

-0.00%

Expected Cash-Flows