Strength in Defense Aerospace Drives Howmet: Can the Momentum Sustain?

Howmet Aerospace Inc. HWM is benefiting from the persistent strength in its defense aerospace market. In the second quarter of 2025, the company’s revenues from the defense aerospace market jumped 21% year over year, which accounted for 17% of its total sales. The surge in revenues was fueled by robust demand for engine spares, particularly related to the F-35 program and an increase in orders for new builds and legacy fighter jet parts.

This uptick significantly benefited Howmet’s Engineered Structures segment, which reported a 5% year-over-year revenue increase in the second quarter. With military-aircraft programs expected to benefit from increased funding, HWM is poised to maintain strong demand momentum in the quarters ahead.

Adding to the optimism, in July 2025, the House of Representatives passed the fiscal year 2026 Defense Appropriations Act, providing a total discretionary allocation of $831.5 billion. Such robust budgetary provisions set the stage for Howmet, which is focused on the defense business, to win more contracts, which is likely to boost its top line.

The boost in military funding enhances Howmet’s ability to secure new contracts. Backed by solid momentum in the F-35 program and consistent government support, the company’s defense aerospace market is well-placed for growth in the quarters ahead.

Segment Snapshot of HWM’s Peers

Among its major peers, Textron Inc.’s TXT defense business is gaining momentum, backed by key U.S. military contracts and steady government support. To this end, it is imperative to mention that in the second quarter of 2025, Textron’s Bell segment signed a contract with the Tunisian Air Force for 12 SUBARU Bell 412EPXs, while Textron Aviation partnered with Thai Aviation Industries to support the Royal Thai Air Force.

It's another peer, GE Aerospace’s GE Defense & Propulsion Technologies business is benefiting from the rising demand for its advanced propulsion systems and military engine programs. GE Aerospace secured a $5 billion contract from the U.S. Air Force to supply F110 engines, parts and support services as part of a Foreign Military Sales (FMS) program. Also, in the first quarter, GE Aerospace received an Indefinite Delivery Indefinite Quantity contract from the U.S. Army.

HWM's Price Performance, Valuation and Estimates

Shares of Howmet have surged 78.7% in the past year compared with the industry’s growth of 12.1%.

From a valuation standpoint, HWM is trading at a forward price-to-earnings ratio of 42.73X, above the industry’s average of 27.25X. Howmet carries a Value Score of D.

The Zacks Consensus Estimate for HWM’s 2025 earnings has been on the rise over the past 60 days.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research