Howmet Aerospace Inc

Howmet Aerospace reported stronger margins in the second quarter of 2026, with adjusted EBITDA margin rising 340 basis points year over year to 32.1% and adjusted operating margin up 350 basis points to 28.8%. Adjusted operating income increased 41% to $733 million, while cost of goods sold rose 16.9% to $1.60 billion and SG&A expenses jumped 66.3% to $148 million. The Engine Products, Fastening Systems and Engineered Structures segments posted margin gains of 470, 90 and 170 basis points respectively, and Forged Wheels added 30 basis points. For full-year 2026, Howmet expects adjusted EBITDA margin of 30.1% to 30.5%, supported by pricing and productivity improvements. The stock has surged 58.6% over the past year and trades at a forward P/E of 46.38X, above the industry average of 32.26X.

Howmet reported second-quarter revenue of $2.55 billion, beating analyst estimates of $2.43 billion and growing 24.1% year over year, while adjusted EPS of $1.33 also topped expectations. The company lifted its full-year revenue guidance to $10.05 billion at the midpoint from $9.65 billion, raised adjusted EPS guidance to $5.27, and set EBITDA guidance of $3.23 billion, above analyst estimates of $3.12 billion. CEO John Plant highlighted 28% commercial aerospace growth driven by new builds and spares, and said capacity expansions will support rising narrow- and wide-body build rates. Analysts on the call pressed management on IGT capacity ramps, coating technology adoption, and Engine Products utilization, with Plant noting new machines are still being brought to full rate.

Howmet Aerospace reported second-quarter 2026 revenue of $2.55 billion, a 24.1% year-on-year increase that exceeded analyst estimates by 4.9%, and raised its full-year guidance. The company now expects full-year revenue of $10.05 billion at the midpoint, up from $9.65 billion, and adjusted earnings per share of $5.27, a 6.7% increase. Adjusted EBITDA guidance was lifted to $3.23 billion, above the $3.12 billion analyst consensus. CEO John Plant cited strong demand in commercial aerospace, defense, and industrial gas turbines, with spares revenue reaching about 22% of total sales in the first half. The company also highlighted capacity expansions and acquisition integration as drivers of future growth.

Analysts have raised their fair value estimate for Howmet Aerospace to $325.93 from $311.68, reflecting updated second-quarter models and growing confidence in the company's earnings power. Several firms lifted price targets during 2026, with Baird moving to $375 from $310 after Q2, Jefferies increasing to $340 from $320, and TD Cowen raising to $320 from $300, citing very strong aerospace aftermarket demand. Citi also raised its target multiple times, most recently to $311 from $303 ahead of Q2 reports. The revised fair value incorporates a slight decline in revenue growth expectations to 13.01% from 13.37%, an improvement in net profit margin to 23.68% from 23.43%, a lower future P/E of 51.44x from 51.95x, and a higher discount rate of 8.03% from 7.87%.

Howmet Aerospace raised its full-year profit forecast by 11%, driven by 20% growth in Commercial Aerospace and a 39% revenue increase in its Gas Turbine business. The company also lifted its 2026 revenue guidance to approximately US$9,575 million to US$9,725 million, with first-quarter 2026 sales of US$2,313 million and net income of US$580 million. The upgraded outlook underscores strong near-term execution but leaves the stock exposed to risks around aircraft build rates and engine aftermarket demand. Howmet's narrative projects US$12.6 billion in revenue and US$2.9 billion in earnings by 2029, implying a fair value of US$311.68 per share, an 8% upside from current levels.

Howmet Aerospace has demonstrated explosive upside potential, driven by strong financial performance. The company's revenue grew at a 12.3% compounded annual growth rate over the last five years, outpacing the average industrials company. Earnings per share expanded at a 48.1% annual rate over the same period, indicating improving profitability. Free cash flow margin increased by 13.2 percentage points over five years, reaching 19.2% in the trailing 12 months. The stock currently trades at $278.48 per share, or 51.5 times forward earnings.

Howmet Aerospace closed at $279.00, gaining 2.58% and exceeding the S&P 500's 0.89% advance. The stock has declined 2.99% over the past month, a smaller loss than the Aerospace sector's 6.03% drop but slightly worse than the S&P 500's 0.63% decline. The company is scheduled to report earnings on August 6, 2026, with analysts forecasting earnings per share of $1.23, a 35.16% increase from the prior-year quarter, and quarterly revenue of $2.41 billion, up 17.52%. For the full fiscal year, the Zacks Consensus Estimates project earnings of $4.98 per share and revenue of $9.74 billion, representing year-over-year growth of 32.1% and 18.02%, respectively. Howmet currently carries a Zacks Rank of #2 (Buy) and trades at a forward price-to-earnings ratio of 54.63, a premium to the Aerospace - Defense industry average of 22.53.

Howmet Aerospace's commercial aerospace revenue surged 20% year over year to exceed $1.2 billion in the first quarter of 2026, now making up 53% of its business. The company's Engine Products segment saw a 29% revenue jump, driven by strong demand for engine spares and a record backlog for new fuel-efficient aircraft. Fastening Systems revenue rose 14%, supported by both commercial and defense aerospace markets. A gradual production recovery at Boeing, especially for the 737 MAX, and healthy build rates at Airbus for A320 and A350 aircraft are expected to further boost demand. Howmet shares have gained 6.8% over the past three months, outperforming the industry's 4.5% decline, though the stock trades at a forward price-to-earnings ratio of 49.42, above the industry average of 32.84.

Howmet Aerospace was added to several Russell large-cap growth and defensive indices on June 27, 2026, while being removed from the Russell Midcap benchmarks, reflecting its reclassification into a larger-cap, growth-oriented index universe. The index reshuffling coincides with heightened attention on Howmet's upcoming August 6, 2026 earnings release, as analysts highlight improving sentiment and expectations. The move mainly affects index ownership and liquidity and does not materially change core business drivers or risks around OEM exposure and capital intensity. Howmet's narrative projects $12.5 billion revenue and $2.9 billion earnings by 2029, with some optimistic analysts modeling revenues near $13.6 billion and earnings of about $3.6 billion by 2029.

Defense stocks are surging as investors bet that rising military budgets, efforts to replace depleted weapons stockpiles, and the race to deploy artificial intelligence across the battlefield will benefit the sector. The iShares U.S. Aerospace & Defense ETF hit its first intraday record high in four months on Monday, boosted by advances in GE Aerospace, Boeing, RTX Corp., and Howmet Aerospace. In late June, President Trump summoned heads of major defense manufacturers to discuss ramping up production of key weapons systems, and days later the Department of Defense awarded Lockheed Martin a $35.3 billion multi-year contract for THAAD missiles and RTX Corp. a roughly $400 million contract for medium-range air-to-air missiles. The Department of Defense's fiscal year 2027 budget request of $1.5 trillion, a 44% increase on the prior year, would be the largest single year of funding since World War II. Beyond traditional contractors, Boeing signed a 7-year agreement for PAC-3 interceptor missiles and a $2 billion Space Force contract for communications satellites, while General Motors signed a multi-billion dollar deal with Lockheed Martin and Ford began courting defense contracts. The integration of AI-enabled technologies is estimated to represent $2 trillion in spending across North America, Europe, and Asia, broadening the list of potential winners to include software and autonomous systems providers. Palantir's Maven battlefield software was designated a program of record by the Defense Department, and Anduril Industries, recently valued at $61 billion, was granted a 10-year, $642 million contract to supply the Marine Corps with AI-powered surveillance equipment.

Stanley Black & Decker reported 31% organic growth in its aerospace business during the first quarter of 2026, driving a 7% organic revenue increase in its Engineered Fastening segment. The company completed the sale of its Consolidated Aerospace Manufacturing business to Howmet Aerospace for $1.8 billion, generating approximately $1.57 billion in net proceeds used to reduce debt. Stanley Black also approved a new $500 million share repurchase program and paid $126 million in dividends. However, soft retail demand for power tools and a highly leveraged balance sheet with $4.7 billion in long-term debt remain concerns.

Howmet Aerospace shares have surged 52.6% over the past year, far exceeding the industry's 7.1% return and the S&P 500's 24.6% gain. The stock closed at $268.86, near its 52-week high of $290.63, and is trading above both its 50-day and 200-day moving averages. First-quarter 2026 commercial aerospace revenue rose 20% year over year to more than $1.2 billion, accounting for 53% of quarterly sales, while defense aerospace revenue increased 10%. The company paid $48 million in dividends and repurchased $300 million in shares during the first three months of 2026, following a 20% dividend hike to 12 cents per share in August 2025 and a $2 billion increase to its share repurchase program in July 2024. The Zacks Consensus Estimate for 2026 earnings has risen 7.7% in the past 60 days, though the stock trades at a forward price-to-earnings ratio of 49.06, well above the industry average of 33.28.

StockStory identifies Howmet as a standout industrials stock to target this week, while recommending investors avoid Avis Budget Group and International Paper. Howmet, with a market cap of $105.9 billion, posted annual revenue growth of 12.3% over five years and annual EPS growth of 43.7%, aided by share repurchases, and its free cash flow margin expanded by 13.2 percentage points. Avis Budget Group, valued at $6.70 billion, saw revenue decline 1% annually over two years and faces eroding returns on capital and depleting cash reserves. International Paper, at $18.51 billion, recorded just 3.9% annual revenue growth over five years while EPS fell 15.5% annually, with waning returns on capital signaling poor investment decisions.

Aerospace and defense stocks delivered a very strong first quarter, with aggregate revenues beating analyst consensus estimates by 2.8% and next-quarter revenue guidance coming in 3.6% above expectations. Axon reported revenues of $807.3 million, up 33.7% year on year and exceeding estimates by 3.7%, while Rocket Lab posted revenues of $200.3 million, a 63.5% increase that beat expectations by 4.9% and delivered the highest guidance raise among its peers. AerSale was the weakest performer, with revenues of $70.61 million falling short of estimates by 18.9%. Ducommun and Howmet also reported beats, with revenues of $209 million and $2.31 billion respectively. Share prices across the group have held steady, rising 3.5% on average since the latest earnings results.

Howmet Aerospace shares have returned 698% over the past five years, ranking among aerospace and defense stocks with the largest five-year share price returns. As of June 29, the stock carries a Strong Buy consensus from 14 analysts, with a one-year average price target of $304.58, implying 13% upside. Bernstein analyst Douglas Harned maintained an Outperform rating and a $318 price target on June 16. The aircraft parts maker started 2026 with first-quarter revenue of $2.31 billion, up 19% year-over-year and beating estimates of $2.24 billion, while adjusted earnings per share of $1.22 rose 42% and topped forecasts by 11 cents. The company raised its full-year revenue guidance to a range of $9.58 billion to $9.73 billion, up from $9 billion to $9.2 billion, and lifted its adjusted earnings outlook to between $4.88 and $5.00 per share, compared with the prior $4.35 to $4.55.

The Motley Fool highlights Howmet Aerospace and TransDigm Group as aerospace and defense stocks with strong earnings growth, suggesting investors consider them before buying SpaceX. Howmet's EPS rose over 540% in the past five years, driven by a 48% surge in commercial aerospace spare parts sales and a 39% jump in gas turbine revenue, while its $1.8 billion acquisition of Consolidated Aerospace Manufacturing is expected to add $275 million in revenue for the rest of 2026. TransDigm's EPS climbed more than 270% over five years, supported by an 18.3% revenue increase to $2.54 billion in its second quarter and a 52.6% EBITDA margin, with the company raising its fiscal 2026 revenue guidance midpoint by $420 million to between $10.3 billion and $10.42 billion. Both companies benefit from airlines flying older fleets longer, boosting high-margin aftermarket parts sales, and are actively pursuing acquisitions and share buybacks.

Space Exploration Technologies posted a net loss of $4.28 billion in the first quarter of 2026, nearly matching its full-year 2025 loss in a single quarter, and has accumulated $41.3 billion in total losses since its founding. Morningstar's discounted cash flow model places the company's fair value at $63 per share, roughly 59% below where the stock trades today. The xAI division, absorbed in an all-stock deal earlier this year, generated $818 million in revenue against $2.47 billion in operating losses. In contrast, GE Aerospace reported orders of $17.3 billion, up 93% year over year, and revenue of $8.9 billion, up 29%, with a commercial backlog of $190 billion. TransDigm Group continues to compound aftermarket revenue from sole-source components, Howmet Aerospace grew revenue 19% to $2.31 billion with adjusted EPS up 42%, and Axon Enterprise reported revenue of $807 million, up 34%, expanding into drone countermeasures and autonomous surveillance tools.

Howmet Aerospace has returned 35.4% so far this year, significantly outpacing the average 4.5% gain of the 67-stock Aerospace sector. The company holds a Zacks Rank of 2, or Buy, and its full-year earnings consensus estimate has risen 11.1% over the past quarter. Within the Aerospace - Defense industry, which has gained an average of 0.8% year-to-date, Howmet's performance stands out. Another sector member, Loar Holdings, has returned 5.4% year-to-date and belongs to the Aerospace - Defense Equipment industry, which is up 14.8% on average.

Howmet Aerospace may not be the single smartest defense stock to buy, but it remains a compelling choice after a 500% gain over the past three years. The company operates across three segments—commercial aerospace engine parts, defense hardware, and industrial gas turbines—all of which are growing, with commercial aerospace revenue up 48% and gas turbines up 39% in the most recent quarter. Defense sales rose 13%, supported by its role as a critical supplier for the F-35 Lightning II fighter jet. Howmet holds an A- credit rating, has reduced net leverage to 0.9 times, and returned $450 million to shareholders in the first quarter while extending its dividend increase streak to five years with a payout ratio of just 10.7%.

Howmet Aerospace Inc. closed three long-standing shelf registrations totaling about US$452.60 million related to ESOP common stock offerings and withdrew a smaller 2019 ESOP shelf, while also reporting a strong start to 2026 with higher revenue, adjusted earnings, and margins. The company lifted its full-year 2026 revenue guidance to about US$9,575 million to US$9,725 million. The shelf closures are mostly administrative and do not materially change the near-term story, where the key catalyst is execution on higher production volumes. Ongoing share repurchases and improved operational efficiency have drawn attention from institutional investors, though risks remain around production hiccups, customer concentration, and cost pressures.

StockStory identified Powell, Howmet, and Dell as three market-beating stocks with strong sales growth, expanding margins, and rising returns on capital. Powell posted a five-year return of 2,588% and saw annual revenue growth of 15.4% over the last two years, while Howmet returned 763% with 12.3% annual revenue growth over five years. Dell delivered a 334% five-year return and 22.2% annual revenue growth over the past two years. All three companies benefited from market share gains, share repurchases, and expanding free cash flow margins.

Since SpaceX began trading, its shares have risen more than 30%, but the debut has split the space trade rather than sparking a broad rally. Old-line aerospace and defense names have broadly caught a bid, with GE Aerospace, Howmet Aerospace, Honeywell, Parker-Hannifin, Eaton, and TransDigm all up roughly 5% to 9%, while Boeing, RTX, Airbus, Wabtec, and Curtiss-Wright are also higher. In contrast, smaller public space stocks have fallen sharply: Rocket Lab is down about 5%, AST SpaceMobile, EchoStar, Viasat, Redwire, Planet Labs, and Satellogic are down roughly 10% to 16%, and Virgin Galactic, Sidus Space, and Intuitive Machines have dropped more than 20%. Before the IPO, these newer names were among the few ways to trade the space theme, but SpaceX’s debut has turned into a sorting machine, forcing them to prove they can win attention on their own.

Howmet Aerospace was a leading performance contributor in the Janus Henderson Forty Fund during the first quarter of 2026, according to the fund's investor letter. The fund highlighted the company's strong competitive positioning, which has allowed it to benefit from rising demand for aircraft parts driven by a growing orders backlog and the need to service aging commercial airline fleets. Howmet also experienced increased demand from the defense industry and has a longer-term opportunity tied to producing gas turbines for data centers. The fund noted that its investment in Howmet several years ago paid off as the company more than doubled its operating margins over the past decade. As of June 16, 2026, Howmet Aerospace shares closed at $277.42, with a market capitalization of about $110.99 billion and a 52-week gain of 62.97%.