Howmet Aerospace (HWM) AI Stock Analysis

• Market Cap: $50.30B
• Dividend Yield: 0.25%
• Average Volume (3M): 3.38M
• Price to Earnings (P/E): 44.2
• Beta (1Y): 1.32
• Revenue Growth: 11.90%
• EPS Growth: 52.65%
• Country: US
• Employees: 23,930
• Sector: Industrials
• Sector Strength: 70
• Industry: Industrial - Machinery
• EPS (TTM): 2.81
• Shares Outstanding: 405,022,520
• 10 Day Avg. Volume: 3,665,430
• 30 Day Avg. Volume: 3,375,263
• PEG Ratio: 0.84
• Price to Book (P/B): N/A
• Price to Sales (P/S): 7.13
• Price to Cash Flow (P/CF): 27.60
• P/FCF Ratio: 22.20
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $145.00
• Price Target Upside: 15.38% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 18

Howmet Aerospace's strong financial performance and positive earnings call outlook are significant strengths, contributing to a robust overall score. However, the technical indicators suggest potential short-term volatility, and the high valuation may deter value investors. These factors are balanced to arrive at a sound stock score.

Positive Factors

Earnings Outlook

Analyst sees opportunity for more than 20% EPS upside by adjusting OEM target rates, indicating a positive outlook for future earnings.

Financial Performance

Howmet Aerospace reported adjusted EPS of $0.74, beating analyst expectations due to strong operating profit.

Shareholder Value

The company increased its dividend by 25%, demonstrating its commitment to returning value to shareholders.

Negative Factors

Inventory Risk

Plant cautioned the high inventory levels being kept at Boeing do pose some destocking risk for the industry at large.

Operational Challenges

Howmet reportedly may halt orders due to Trump tariffs.

Supply Chain Risk

If Howmet is unable to complete orders, this would cause a blow to the aerospace supply chain.

Howmet Aerospace Business Overview & Revenue Model

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.

How the Company Makes Money

Howmet Aerospace makes money through the design, manufacture, and sale of its highly specialized products, primarily serving the aerospace and transportation industries. The company's revenue model revolves around producing components for jet engines, aircraft structures, industrial gas turbines, and commercial vehicle wheels. Key revenue streams include contracts with major aerospace manufacturers like Boeing and Airbus, sales to defense contractors, and partnerships with automotive companies. Howmet Aerospace benefits from long-term agreements and recurring sales due to the demand for replacement parts and the high entry barriers in its specialized markets. Additionally, the company invests in research and development to innovate and maintain its competitive edge, further supporting its earnings.

Howmet Aerospace Financial Statement Overview

Summary

Howmet Aerospace has shown notable improvements in profitability and balance sheet stability, with a significant increase in profit margins and cash flow. Despite a decline in revenue, the company's financial strategy has enhanced its resilience and growth potential.

Income Statement

Howmet Aerospace has demonstrated strong growth in EBIT and net income over recent years, despite a decline in total revenue from 2019 to 2023. The company improved its net profit margin from 3.31% in 2019 to 17.38% in 2023, suggesting enhanced operational efficiency. However, the significant drop in total revenue from 2019 to 2023 remains a concern.

Balance Sheet

The debt-to-equity ratio has improved significantly, dropping from 1.29 in 2019 to 0.001 in 2023, indicating reduced leverage and improved financial health. The equity ratio has also shown an upward trend, suggesting a stronger equity position. These improvements reflect a stable and strengthening balance sheet.

Cash Flow

The company has shown a strong positive trend in free cash flow, growing from negative figures in 2019 to a robust $977 million in 2023. The operating cash flow to net income ratio has improved, indicating efficient cash generation relative to net income. This positive cash flow trend underscores the company's ability to generate cash effectively.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
7.43B	6.64B	5.66B	4.97B	5.26B
	Gross Profit
2.31B	1.87B	1.56B	1.38B	1.38B
	EBIT
1.63B	1.20B	919.00M	748.00M	626.00M
	EBITDA
1.84B	1.47B	1.26B	1.09B	831.00M
	Net Income Common Stockholders
1.16B	765.00M	469.00M	258.00M	261.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
564.00M	610.00M	791.00M	720.00M	1.61B
	Total Assets
10.52B	10.43B	10.26B	10.22B	11.45B
	Total Debt
6.00M	3.83B	4.16B	4.23B	5.08B
	Net Debt
-558.00M	3.23B	3.37B	3.51B	3.46B
	Total Liabilities
5.96B	6.39B	6.65B	6.71B	7.87B
	Stockholders Equity
4.55B	4.04B	3.60B	3.51B	3.58B
Cash Flow		Free Cash Flow
977.00M	682.00M	540.00M	250.00M	-258.00M
	Operating Cash Flow
1.30B	901.00M	733.00M	449.00M	9.00M
	Investing Cash Flow
-316.00M	-215.00M	-135.00M	107.00M	271.00M
	Financing Cash Flow
-1.03B	-868.00M	-526.00M	-1.44B	-369.00M

Howmet Aerospace Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 125.67
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HWM, the sentiment is Positive. The current price of 125.67 is below the 20-day moving average (MA) of 128.16, below the 50-day MA of 128.82, and above the 200-day MA of 108.67, indicating a neutral trend. The MACD of 1.07 indicates Positive momentum. The RSI at 52.61 is Neutral, neither overbought nor oversold. The STOCH value of 44.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HWM.

Howmet Aerospace Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DOV	76 Outperform	$22.22B	8.34	24.30%	1.27%	-2.99%	159.26%
ITW	74 Outperform	$68.15B	19.84	110.24%	2.54%	-1.30%	20.26%
HWM	73 Outperform	$50.30B	44.16	26.89%	0.25%	11.90%	52.65%
CMI	73 Outperform	$39.38B	10.08	41.27%	2.50%	0.14%	444.36%
OTIS	68 Neutral	$38.41B	23.87	-33.93%	1.61%	0.37%	19.87%
PH	68 Neutral	$72.80B	23.39	25.87%	1.15%	0.41%	19.76%
Sector *	62 Neutral	$7.62B	13.01	3.19%	3.32%	3.77%	-14.28%