Will Defense Aerospace Strength Continue to Drive Howmet's Growth?

Howmet Aerospace Inc. HWM is benefiting from strong demand in the defense aerospace market, which has become an important growth pillar alongside the commercial aerospace market.

In the second quarter of 2025, revenues from the defense aerospace market climbed 21% year over year, which accounted for 17% of HWM’s total sales. This followed a 19% increase in the first quarter. This growth was driven by robust demand for engine spares, especially for the F-35 program, as well as new builds and spare parts for legacy fighter jets. Howmet’s Engineered Structures and Engine Products segments reported impressive results in the second quarter, driven by strength in the defense aerospace market. The Engineered Structures segment’s revenues rose 5.5% year over year, while the Engine Products segment reported a 13.2% year-over-year revenue increase in the quarter.

Also, 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 remains focused on its defense business to win more contracts. This is likely to boost HWM’s top line performance.

Although challenges such as tariffs, inflationary pressures and geopolitical risks remain, the defense aerospace market is proving to be a steady cushion for HWM. With strong momentum in the F-35 program and steady government support, Howmet’s defense aerospace market is expected to see more gains in the quarters ahead.

HWM’s Peers in the Defense Space

Among its major peers, Textron Inc.’s TXT defense business is gaining momentum, backed by key U.S. military contracts and steady government support. In the second quarter of 2025, Textron’s Systems segment signed a contract with the Tunisian Air Force for 12 SUBARU Bell 412EPXs. Meanwhile, in July 2025, Textron’s Bell segment was selected for the next phase of the Defense Advanced Research Projects Agency Speed and Runway Independent Technologies X-Plane program.

Another peer, GE Aerospace’s GE Defense & Propulsion Technologies business is benefiting from the growing popularity for its propulsion & additive technologies, critical aircraft systems and aftermarket services in the defense sector. In the second quarter of 2025, 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 program. Also, in the first quarter, GE Aerospace received an Indefinite Delivery Indefinite Quantity contract from the U.S. Army to supply F110 engines for F-15 and F-16 jets used by allied countries.

HWM's Price Performance, Valuation and Estimates

Shares of Howmet have surged 88.4% in the past year compared with the industry’s growth of 12.5%.

From a valuation standpoint, HWM is trading at a forward price-to-earnings ratio of 47.01X, above the industry’s average of 28.28X. Howmet carries a Value Score of D.

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

Howmet currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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