HWM Faces Weakness in Commercial Transportation Market: What's Ahead?

Howmet Aerospace Inc. HWM has been experiencing persistent weakness in its commercial transportation market. In third-quarter 2025, revenues from the commercial transportation market declined 3% on a year-over-year basis, following 14% and 4% declines in the first and second quarters, respectively.

Lower commercial truck builds, given tariff-related and economic uncertainty in North America, have been impacting the company’s near-term performance. Demand in the commercial transportation markets served by the Forged Wheels segment is expected to remain soft in the near term due to lower OEM builds. Also, rising raw material costs, particularly aluminum, and stringent emission regulations are concerning for the segment.

As a global player, Howmet Aerospace remains vulnerable to supply-chain volatility, which has already led to delays and higher costs in recent years. These supply-chain challenges in the transportation and aerospace sectors might continue affecting the company’s ability to deliver finished products to customers within the stipulated time.

Despite difficult conditions in the commercial transportation market, Howmet Aerospace’s performance is being bolstered by sustained strength in the commercial and defense aerospace markets. Strong demand for engine spares for the F-35 program, aerospace fastening systems and airframe structural components further contributes to a promising outlook for the company.

Segment Snapshot of HWM’s Peers

ITT Inc.’s ITT Motion Technologies segment is witnessing strong demand for brake components and specialized sealing solutions, shock absorbers and damping technologies in OEM and rail transportation markets. The segment’s organic revenues rose 1.4% year over year in the first nine months. For 2025, ITT expects its overall organic sales to increase 3-5% from the year-ago level.

Kennametal Inc.’s KMT Metal Cutting segment is benefiting from solid momentum across its several end markets. This includes an increase in aerospace original equipment manufacturer build rates in the Americas region, easing supply-chain pressures and robust U.S. and international defense spending volumes. Kennametal’s Metal Cutting segment’s organic revenues increased 3% year over year in the first three months of fiscal 2026.

HWM's Price Performance, Valuation and Estimates

Shares of Howmet Aerospace have surged 84.7% in the past year compared with the industry’s growth of 36.1%.

From a valuation standpoint, HWM is trading at a forward price-to-earnings ratio of 49.51X, above the industry’s average of 32.53X. Howmet Aerospace carries a Value Score of D.

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

Howmet Aerospace 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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