Howmet's Commercial Aerospace Market Gains Momentum: Can It Sustain?

Howmet Aerospace Inc. HWM is benefiting from persistent strength in the commercial aerospace market. Revenues from the commercial aerospace market increased 15% year over year (exceeding $1.1 billion) in the third quarter of 2025, constituting 53% of its business. Also, in the first and second quarters, revenues from the market increased 9% and 8% year over year, respectively.

The sustained strength was attributed to increasing demand for engine spares and a record backlog for new, more fuel-efficient aircraft with reduced carbon emissions. This significantly boosted Howmet’s Engine Products segment’s performance, which reported a 17% year-over-year revenue increase in the third quarter.

Boeing is also anticipated to witness a gradual production recovery, particularly in the 737 MAX widebody aircraft, with an end to its workers’ strike, which is likely to boost demand for Howmet’s products in the market. Also, healthy build rates at Airbus for A320 (narrowbody) and A350 (widebody) aircraft hold promise for spare engine demand. With commercial aircraft programs expected to continue benefiting from the strong air travel activities, HWM is poised to maintain solid demand momentum moving ahead.

While the commercial aerospace market has been the major driver, the defense side of the industry has also been witnessing positive momentum, cushioned 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 persistent strength in the commercial aerospace market, with growth in both the aftermarket and OEM verticals. RTX reported 11.9% sales growth in the third quarter, driven by persistent strength in the Collins Aerospace and Pratt & Whitney segments. Rising aircraft utilization and solid orders for its wide range of combat-proven defense products 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 10% in the third quarter. Thanks to growing air travel, Textron has also been witnessing strong order activity, which resulted in a backlog of $7.7 billion for the Aviation segment.

HWM's Price Performance, Valuation and Estimates

Shares of Howmet have surged 83.9% in the past year compared with the industry’s growth of 20.9%.

From a valuation standpoint, HWM is trading at a forward price-to-earnings ratio of 49.29X, above the industry’s average of 29.15X. Howmet carries a Value Score of D.

The Zacks Consensus Estimate for HWM’s 2025 and 2026 earnings has been on the rise 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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