Can Howmet Sustain Growth as Commercial Aerospace Demand Surges?

The strongest driver of Howmet Aerospace Inc.’s HWM business at the moment is the commercial aerospace market. Revenues from the market increased 8% year over year in the second quarter of 2025, constituting more than half of its business. Also, in the first quarter, revenues from this market increased 9%. The sustained strength was driven by new, more fuel-efficient aircraft with reduced carbon emissions and increased spare demand for engines. This significantly boosted Howmet’s Engine Products segment’s performance, which reported a 13.2% year-over-year revenue increase in the second quarter.

Boeing is also anticipated to witness a gradual production recovery, particularly in the 737 MAX aircraft, which is likely to boost demand for Howmet’s products in the market. Also, healthy build rates at Airbus for the A320/321 aircraft hold promise for HWM’s engine spares demand. With commercial aircraft programs expected to continue benefiting from the strength in air travel, HWM is poised to maintain strong demand momentum in the quarters ahead.

While the commercial aerospace market has been the major driver, the defense side of the industry has also not lagged behind, supported by steady government support. Strong demand for engine spares, particularly for the F-35 program and robust military budgets, is fueling strong growth in this market.

HWM’s Peers in the Commercial Aerospace Market

Among its major peers, RTX Corporation RTX is witnessing solid momentum in the commercial aerospace market, with growth in both aftermarket and OEM verticals. RTX reported 9% sales growth in the second quarter, driven by persistent strength in the Collins Aerospace and Pratt & Whitney segments. Rising aircraft utilization and demand for sustainable technologies are supporting RTX Corp.’s growth.

Improving commercial air passenger traffic has been benefiting Textron Inc.’s TXT Aviation business unit. Strong fleet utilization, backed by improving commercial air travel, contributed to Textron Aviation unit’s revenue growth of 2.8% in the second quarter. Thanks to growing air travel, Textron has also been witnessing strong order activity, which resulted in a backlog of $7.85 billion for the Aviation segment.

HWM's Price Performance, Valuation and Estimates

Shares of Howmet have surged 89.7% in the past year compared with the industry’s growth of 22.5%.

From a valuation standpoint, HWM is trading at a forward price-to-earnings ratio of 46.53X, above the industry’s average of 28.86X.

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

The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

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

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