Gautam Khanna, an analyst from TD Cowen, maintained the Buy rating on Howmet Aerospace (HWM – Research Report). The associated price target is $140.00.
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Gautam Khanna has given his Buy rating due to a combination of factors including Howmet Aerospace’s financial guidance and market potential. The company’s guidance for C25 earnings per share suggests a potential upside driven by favorable incremental margins and expected production rates for Boeing’s 737 aircraft. Howmet’s management indicates that the strong margins observed in the Fastener and Engineered Structures segments during Q4 are sustainable, which could lead to high incremental margins in the upcoming quarters.
Additionally, the growth in spare parts sales, which are projected to increase to 20% of total sales, provides a stable demand and supports a balance in the supply and demand of engine parts. This stability is crucial even if original equipment production falls short. Furthermore, Howmet’s cash deployment strategy, with an authorized share repurchase program and minimal debt maturities, indicates a focus on shareholder returns, strengthening the case for a Buy rating.
In another report released today, Barclays also maintained a Buy rating on the stock with a $140.00 price target.