Howmet Aerospace supplies engineered components to the commercial aerospace, defense and industrial markets. Its advantage stems from decades of accumulated R&D in materials science and manufacturing, and it faces limited competition as a US manufacturer for the aerospace industry. Management has demonstrated excellent capital allocation through investments in high-growth projects that leverage the company's strengths.

Howmet Aerospace is a leading provider of advanced components to aerospace, defense, transportation, and industrial gas turbines. Jennison sees a decade plus demand runway, and the company is leveraged to record original equipment manufacturer (OEM) backlogs and rising industrial gas turbine investment, supported in part by AI driven data center power needs.

Aircraft components manufacturer Howmet Aerospace was another contributor. Strong competitive positioning has enabled Howmet to capitalize on rising demand for aircraft parts, both to meet a growing orders backlog in the airplane production market and to service aging commercial airline fleets. The company also has experienced rising demand from the defense industry, and it has a longer-term opportunity tied to its production of gas turbines to power data centers. We invested in Howmet several years ago, as we believed the potential of the business was not fully appreciated by other investors. Our confidence paid off, as the company has continued to build on its competitive advantages, while more than doubling its operating margins over the past decade.

Howmet was mentioned as part of a strategic decision to trim exposure in more expensive growth and higher-PE names. The manager noted that they strategically trimmed exposure in Howmet along with other companies, but did not provide a specific argument for or against the company itself.

Howmet Aerospace, Inc. has been a strong contributor to our portfolio, reflecting its solid performance and growth potential. With a weight of 4.66% in our portfolio and a total return effect of 2.75%, it demonstrates its ability to create value. We believe that Howmet's position in the aerospace sector, coupled with its competitive advantages, supports our bullish outlook on the company.

Howmet Aerospace was a top contributor to relative performance. The specialized aircraft components manufacturer’s Q1 2025 earnings exceeded expectations, as the business continued to benefit from cyclical aerospace recovery and aftermarket demand. Howmet has gained market share by investing through the down cycle while competitors pulled back. The company also benefits from industrial gas turbine demand supporting power generation needs for AI infrastructure.

Howmet is a precision-engineered aerospace and defense supplier that benefits from long product cycles and high switching costs. Its exposure to both commercial and military aircraft demand creates a durable earnings stream. We value HWM not just for its strong fundamentals, but for its discipline in capital allocation and margin expansion potential as the aviation cycle continues to recover post-COVID.

Howmet Aerospace, Inc. continued to outperform during the quarter after the company reported another earnings beat. While initial 2025 guidance was somewhat conservative, we view them as prudently cautious given ongoing supply chain issues while also establishing a low bar for ongoing earnings beats. A major fire at a competitor’s fastener facility has the potential to further exacerbate industry supply chain issues, which could imperil competitors’ planned production ramps. For Howmet, it is an opportunity to gain share, and any slowdown would be offset by its high-margin aftermarket sales. We continue to view Howmet as exhibiting resilient growth driven by its core aerospace exposure, with increasing contribution from its industrial gas turbine component business.

Shares in Howmet continued to outperform during the quarter after the company reported another earnings beat. While initial 2025 guidance was somewhat conservative, we view them as prudently cautious given ongoing supply chain issues while also establishing a low bar for ongoing earnings beats. A major fire at a competitor’s fastener facility has the potential to further exacerbate industry supply chain issues, which could imperil competitors’ planned production ramps. For Howmet, it is an opportunity to gain share, and any slowdown would be offset by its high-margin aftermarket sales. We continue to view Howmet as exhibiting resilient growth driven by its core aerospace exposure, with increasing contribution from its industrial gas turbine component business.

Howmet Aerospace, a manufacturer of specialized aircraft components, was a top contributor to relative performance. The company reported solid earnings driven by continued demand for aerospace parts. Howmet successfully navigated Boeing's 2024 challenges while gaining market share from competitors. Strategic investments during the pandemic helped the company gain share over competitors, one of which suffered a major plant fire, likely prolonging Howmet’s advantage.