Can Howmet Sustain Growth as Defense Aerospace Demand Surges?

Howmet Aerospace Inc.’s HWM defense aerospace market is playing a significant role in driving its overall growth. In second-quarter 2025, the company’s revenues from the defense aerospace market accounted for 17% of its total sales, increasing 21% year over year. The surge in revenues was augmented by the 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 solid momentum is significantly benefiting Howmet’s Engineered Structures segment, which reported a 5% year-over-year revenue increase in the second quarter. With a solid pipeline of military-aircraft programs and a robust defense budget, HWM is poised to maintain strong demand momentum in the quarters ahead.

It's worth noting that 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, which is likely to boost its top line.

Amid this backdrop, Howmet is scheduled to release third-quarter 2025 results on Oct. 30, before market open. Driven by its business strength, the Zacks Consensus Estimate for revenues from its defense aerospace market is pegged at $351 million, indicating an increase of 21.5% year over year.

HWM’s Peers in the Defense Aerospace Market

Among its major peers, 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 program.

It's another peer, 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 second-quarter 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.

HWM's Price Performance, Valuation and Estimates

Shares of Howmet have surged 98.9% in the past year compared with the industry’s growth of 24.4%.

From a valuation standpoint, HWM is trading at a forward price-to-earnings ratio of 48.52X, above the industry’s average of 29.55X. Howmet carries a Value Score of B.

The Zacks Consensus Estimate for HWM’s 2025 earnings has inched up 0.3% over the past 60 days.

The company 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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