Solid Demand in Defense Aerospace Drives Howmet: Can the Momentum Last?

Howmet Aerospace Inc. HWM is benefiting from solid momentum in its defense aerospace market. After experiencing growth of 19% and 21% in the first and second quarter, respectively, revenues from the defense aerospace market surged 24% year over year in third-quarter 2025. The surge in revenues was driven by the robust demand for engine spares, particularly related to the F-35 program and an increase in orders for legacy fighter jet spares.

This solid momentum is significantly benefiting Howmet’s Engineered Structures segment, which reported 9% year-over-year revenue growth in the first nine months of 2025. 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 strong budgetary allocation for defense. Such robust provisions set the stage for Howmet, which remains focused on its defense business.

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

Honeywell International Inc. HON is benefiting from strong momentum in its defense and space business. In the first, second and third quarter of 2025, organic sales from Honeywell’s defense and space business surged 10%, 13% and 10%, respectively, on a year-over-year basis. The surge in revenues was fueled by stable U.S. and international defense spending volumes and sustained demand from the current geopolitical climate.

Parker-Hannifin Corp.’s PH Aerospace Systems segment is experiencing strength in the commercial and military markets across both the OEM and aftermarket channels. Revenues from Parker-Hannifin’s Aerospace Systems segment jumped 13.3% year over year in the first quarter of fiscal 2026 (ended September 2025). Parker-Hannifin’s Aerospace Systems segment is poised to gain from strong demand for its products and aftermarket support services in the general aviation market.

HWM's Price Performance, Valuation and Estimates

Shares of Howmet have gained 8.3% in the past three months compared with the industry’s growth of 1.9%.

From a valuation standpoint, HWM is trading at a forward price-to-earnings ratio of 55.55X, above the industry’s average of 44.73X. Howmet carries a Value Score of D.

The Zacks Consensus Estimate for HWM’s 2025 earnings has increased 2.8% 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research