Strength in Defense Aerospace Drives Howmet: Will the Momentum Last?

Howmet Aerospace Inc.’s HWM defense aerospace market continues to play a significant role in driving its overall growth. In third-quarter 2025, the company’s revenues from the defense aerospace market accounted for 17% of its total sales, increasing 24% year over year. The surge in revenues was augmented by robust orders for engine spares for the F-35 program and spares for legacy fighters like the F-15 and the F-16.

This strong momentum in the defense aerospace market is driving Howmet’s Engineered Structures segment, which reported a 14% year-over-year revenue increase in the third quarter. With a solid pipeline of military-aircraft programs, 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.

The robust military funding enhances Howmet’s ability to secure new contracts. Backed by favorable geopolitical developments 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 third-quarter 2025, the company’s Bell segment signed a contract with Global Medical Response to supply seven Bell 429s with the option to purchase an additional eight helicopters.

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. The Defense & Propulsion Technologies business’ revenues increased 11% year over year and orders grew 5% in the first nine months.

HWM's Price Performance, Valuation and Estimates

Shares of Howmet have gained 13.7% in the past three months against the industry’s decline of 3.2%.

From a valuation standpoint, HWM is trading at a forward price-to-earnings ratio of 46.06X, above the industry’s average of 28.56X. Howmet carries a Value Score of D.

The Zacks Consensus Estimate for HWM’s 2025 earnings has increased 2.8% over the past 30 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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