Howmet's Transportation Market Under Pressure: Is the Risk Priced In?
The company is dependent on a global supply chain, and in recent years, it has experienced supply-chain disruptions, particularly in the transportation and aerospace sectors, that resulted in delays and increased costs. Persistent supply-chain issues are likely to continue affecting the delivery of its finished products to its customers within the stipulated time, which might impact its top-line performance.
Nevertheless, solid momentum in Howmet's commercial aerospace market, driven by robust OEM build rates and wide-body aircraft recovery, is expected to bolster its top line. Also, strength in the defense aerospace business, driven by rising U.S. & international defense budgets, bodes well for the company.
Segmental Performance of HWM's Peers in Q1
Improving commercial air passenger traffic has been benefiting Textron Inc. 's TXT Aviation business unit. Strong fleet utilization, backed by improving commercial air travel, contributed to Textron Aviation unit's aftermarket revenue growth of 6% on a year-over-year basis in the first quarter of 2025. Thanks to growing air travel, Textron has also been witnessing strong order activity, which resulted in a backlog of $7.87 billion for the Aviation segment.
Its another peer, RTX Corporation RTX, has been experiencing improving commercial OEM and commercial aftermarket sales in recent times. Notably, its first-quarter 2025 results reflected solid organic year-over-year sales growth of 8%. In particular, improvement in commercial aerospace bolstered quarterly results for both its Collins Aerospace and Pratt & Whitney business segments.
The Zacks Rundown for HWM
Shares of Howmet have surged 27.3% in the past three months compared with the industry 's growth of 8.7%.
Image Source: Zacks Investment Research
From a valuation standpoint, HWM is trading at a forward price-to-earnings ratio of 46.07X, above the industry average of 26.14X. The metric is pegged higher than its five-year median of 25.61X. HWM carries a Value Score of F.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for HWM's earnings for second-quarter 2025 and 2025 has increased 7.5% and 6.8%, respectively, in the past 60 days.
HWM stock currently sports a Zacks Rank #1 (Strong Buy).
You can see the complete list of today's Zacks #1 Rank stocks here.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
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