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Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
Howmet Aerospace's Sloan Ratio for the quarter that ended in Mar. 2026 was -0.24%.
As of Mar. 2026, Howmet Aerospace has a Sloan Ratio of -0.24%, indicating the company is in the safe zone and there is no funny business with accruals.
Howmet Aerospace (NYSE:HWM) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Mar. 2026, Howmet Aerospace has a Sloan Ratio of -0.24%, indicating the company is in the safe zone and there is no funny business with accruals.
Howmet Aerospace Sloan Ratio % Related Terms
Howmet Aerospace Sloan Ratio % Historical Data
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The historical data trend for Howmet Aerospace's Sloan Ratio % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Aerospace & Defense subindustry, Howmet Aerospace's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Howmet Aerospace Sloan Ratio % vs Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, Howmet Aerospace's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Howmet Aerospace's Sloan Ratio % falls into.
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Howmet Aerospace's Sloan Ratio for the fiscal year that ended in Dec. 2025 is calculated as
Howmet Aerospace's Net Income for the trailing twelve months (TTM) ended in Mar. 2026 was 407 (Jun. 2025 ) + 385 (Sep. 2025 ) + 372 (Dec. 2025 ) + 580 (Mar. 2026 ) = $1,744 Mil.
Howmet Aerospace's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2026 was 446 (Jun. 2025 ) + 531 (Sep. 2025 ) + 654 (Dec. 2025 ) + 453 (Mar. 2026 ) = $2,084 Mil.
Howmet Aerospace's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2026 was -97 (Jun. 2025 ) + -104 (Sep. 2025 ) + -122 (Dec. 2025 ) + 14 (Mar. 2026 ) = $-309 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Howmet Aerospace (HWM) has a Sloan Ratio % of -0.24% as of Mar. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Howmet Aerospace and its competitors.
Is Howmet Aerospace's Sloan Ratio % too high?
Howmet Aerospace's current Sloan Ratio % is -0.24%. Overall, Howmet Aerospace has a GF Score™ of 82/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Howmet Aerospace's Sloan Ratio % compare to LMT and GD?
Howmet Aerospace's Sloan Ratio % of -0.24% can be compared against companies in the Aerospace & Defense industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Sloan Ratio % for an Aerospace & Defense company?
A good Sloan Ratio % depends on the Aerospace & Defense industry context. However, Sloan Ratio % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Sloan Ratio % mean?
A high Sloan Ratio % can signal that a stock is expensive relative to its fundamentals. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Howmet Aerospace and its competitors. Howmet Aerospace's current Sloan Ratio % is -0.24%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Howmet Aerospace stock overvalued right now?
Based on GuruFocus' analysis, Howmet Aerospace (HWM) is currently considered Significantly Overvalued. The stock's GF Value™ is $140.73, compared to a current price of $272.43 — trading 93.6% above its estimated fair value. The current Sloan Ratio % is -0.24%. Howmet Aerospace's overall GF Score™ is 82/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Sloan Ratio % calculated?
Sloan Ratio % is calculated from a company's financial statements. For Howmet Aerospace (HWM), the current Sloan Ratio % is -0.24% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Howmet Aerospace (HWM) Overvalued in 2026?
Based on GuruFocus' analysis, Howmet Aerospace stock appears to be overvalued.
The current stock price of $272.43 is trading 93.6% above its estimated GF Value™ of $140.73.
GuruFocus considers Howmet Aerospace to be Significantly Overvalued.
Key valuation signals for HWM:
Sloan Ratio %: -0.24%
GF Value™: $140.73 vs. price of $272.43 (93.6% above fair value)
No single metric tells the full story. See the HWM stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Howmet Aerospace Inc offers engineered solutions for the aerospace and transportation industries. The company's products and solutions include investment castings for jet engines and industrial gas turbines; seamless rolled rings for jet engines; fastening systems for aerospace, industrial and commercial transportation applications; forged jet engine components (e.g., jet engine disks); machined and forged aircraft parts; and forged aluminum commercial vehicle wheels, all of which are sold directly to customers or through distributors. It has four reportable segments: Engine Products, which derives key revenue, Fastening Systems, Engineered Structures, and Forged Wheels. Geographically, the company derives maximum revenue from the USA, followed by France, Japan, Germany, and other markets.
82GF Score
Get the complete analysis for HWM
Sloan Ratio % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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