In the latest trading session, shares of Howmet Aerospace Inc. (HWM) rose by 1.87%, closing at $189.25. This performance outstripped the S&P 500, which gained 0.47% for the day. The broader market reflected modest gains as well, with the Dow Jones Industrial Average increasing by 0.11%, and the Nasdaq composite, known for its technology-heavy listings, rising by 0.94%.
Over the last month, Howmet’s stock has demonstrated considerable strength, appreciating by 8.48%. In contrast, the aerospace sector overall experienced a slight decline of 0.19%, while the S&P 500 registered a more significant increase of 2.32%.
Market analysts are keenly anticipating Howmet’s upcoming earnings report. The company is expected to post earnings per share (EPS) of $0.90, reflecting a substantial increase of 26.76% compared to the same quarter in the previous year. Revenue projections are also optimistic, with estimates hitting $2.04 billion, marking an 11.3% rise from the equivalent quarter last year.
For the full fiscal year, Zacks Consensus Estimates predict earnings of $3.57 per share and revenues reaching $8.12 billion, indicating a year-over-year growth of 32.71% and 9.35%, respectively. Such projections have captured the attention of the investment community, particularly in light of revisions to analyst estimates, which often signal shifting business dynamics. Positive changes in these estimates typically indicate growing optimism among analysts regarding the company’s profitability.
The Zacks Rank system, which provides actionable ratings based on earnings estimate revisions, currently places Howmet at a #2 (Buy). This rating system has a sterling reputation for predicting future stock performance, with #1 rated stocks generating an average return of 25% annually since 1988. Despite a stable consensus EPS projection over the last month, the stock’s rating reflects solid confidence from analysts.
Valuation metrics for Howmet also stand out, with its Forward Price-to-Earnings (P/E) ratio at 51.99—a significant premium when compared to the industry average of 24.49. Furthermore, the company has a PEG ratio of 2.41, which adjusts the P/E ratio by accounting for expected earnings growth, compared to an average PEG ratio of 2.07 within the Aerospace – Defense sector.
This sector itself is performing relatively well, currently boasting a Zacks Industry Rank of 91, positioning it in the top 37% of more than 250 industries tracked. With several indicators suggesting robust future growth, Howmet remains an intriguing prospect for investors seeking opportunities in the aerospace industry.
