BTIG has increased its price target for Howmet Aerospace (HWM, Financial) from $150 to $180, maintaining a Buy rating on the stock. This decision follows a record-setting quarter for the company, marked by impressive figures in adjusted EBITDA, EBITDA margin, revenue, and earnings. According to the analyst, Howmet Aerospace also capitalizes on using a significant proportion of revert and recycled materials, effectively mitigating risks associated with tariffs.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 22 analysts, the average target price for Howmet Aerospace Inc (HWM, Financial) is $151.83 with a high estimate of $185.00 and a low estimate of $92.00. The average target implies an downside of 1.46% from the current price of $154.07. More detailed estimate data can be found on the Howmet Aerospace Inc (HWM) Forecast page.
Based on the consensus recommendation from 26 brokerage firms, Howmet Aerospace Inc's (HWM, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Howmet Aerospace Inc (HWM, Financial) in one year is $71.84, suggesting a downside of 53.37% from the current price of $154.07. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Howmet Aerospace Inc (HWM) Summary page.
HWM Key Business Developments
Release Date: May 01, 2025
- Revenue: Record revenue increased 6% year-over-year.
- EBITDA Margin: 28.8%, up 480 basis points year-over-year.
- Operating Margin: 25.3%, up 500 basis points year-over-year.
- Free Cash Flow: $134 million, a record for the first quarter.
- Earnings Per Share (EPS): $0.86, up 51% year-over-year.
- Commercial Aerospace Revenue: Up 9% year-over-year.
- Defense Aerospace Revenue: Up 19% year-over-year.
- Commercial Transportation Revenue: Down 14% year-over-year.
- Industrial and Other Markets Revenue: Up 10% year-over-year.
- Engine Segment Revenue: $996 million, up 13% year-over-year.
- Fastening Systems Revenue: $412 million, up 6% year-over-year.
- Engineered Structures Revenue: $282 million, up 8% year-over-year.
- Forged Wheels Revenue: Down 13% year-over-year.
- Net Debt to EBITDA: Record low of 1.4 times.
- Cash Balance: $537 million at quarter-end.
- Share Buyback: $125 million in Q1, $100 million in April.
- Quarterly Dividend: Increased 25% to $0.10 per share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Howmet Aerospace Inc (HWM, Financial) reported a record revenue increase of 6% year-over-year, with all segments showing growth.
- EBITDA margin reached 28.8%, with operating margin up 500 basis points year-over-year.
- Free cash flow was a positive $134 million, marking a record for the first quarter.
- Commercial Aerospace revenue grew by 9% year-over-year, driven by strong demand for engine spares.
- Defense Aerospace saw robust growth of 19% year-over-year, supported by demand for F-35 fighter jet engine spares.
Negative Points
- Commercial Transportation revenue declined by 14% in the first quarter, reflecting challenges in the sector.
- The expected increase in Commercial Truck builds in the second half is now uncertain due to North American economic uncertainties.
- Tariffs have increased uncertainty and reduced confidence in air travel, impacting Howmet Aerospace Inc (HWM)'s outlook.
- Wide-body aircraft production ramp-up has been slower than expected, affecting Fastening Systems and Engineered Structures.
- The company faces potential impacts from tariffs, with a gross impact estimated at $80 million and a net impact of less than $15 million in 2025.
