Howmet Aerospace Inc. (HWM): A Bull Case Theory

We came across a bullish thesis on Howmet Aerospace Inc. on R. Dennis’s Substack by OppCost. In this article, we will summarize the bulls’ thesis on HWM. Howmet Aerospace Inc.'s share was trading at $215.53 as of January 27th. HWM’s trailing and forward P/E were 60.50 and 48.78 respectively according to Yahoo Finance.

Howmet Aerospace Inc. provides advanced engineered solutions for the aerospace and transportation industries in the United States and internationally. HWM is positioned as a mission-critical supplier at the core of global aerospace and industrial infrastructure, making it a business that is not just a market leader but an absolute necessity. The company specializes in highly engineered components such as turbine blades capable of operating at extreme temperatures, and for many aerospace programs it serves as a sole-source supplier.

This creates a durable moat rooted in proprietary materials science, deep customer integration, and long qualification cycles that make replacement both costly and impractical. As a result, Howmet sits at the heart of both commercial and defense aviation, benefiting directly from long-term secular demand rather than short-term cycles.

A major near-to-medium-term tailwind comes from the aerospace aftermarket. Ongoing production delays at aircraft manufacturers have forced airlines to keep planes in service longer, driving a surge in demand for engine spares and replacement parts. This aftermarket exposure is especially attractive given its high margins and recurring nature, areas where Howmet has consistently demonstrated execution strength. Beyond aerospace, the company is also benefiting from accelerating demand in its industrial gas turbine business, driven by the rapidly growing power needs of AI-driven data centers, adding a second structural growth vector to the story.

Operationally, Howmet has established itself as a reliable “beat and raise” compounder, having consistently lifted guidance through 2025 and now targeting approximately $9 billion in revenue by 2026. While the stock has already delivered a strong run, this strength has created an opportunity in the options market rather than a reason to step aside.

Selling February 2026 $190 puts allows investors to generate income while maintaining a meaningful margin of safety relative to current prices and key technical levels. If the shares remain elevated, the premium is captured outright; if volatility creates a pullback, investors are positioned to own a high-quality, generational asset at a discounted entry price. This approach reflects disciplined capital allocation—getting paid to wait while anchoring exposure to one of the indispensable backbones of the aerospace recovery.

Previously, we covered a bullish thesis on TransDigm Group Incorporated (TDG) by Summit Stocks in May 2025, which highlighted its dominant aftermarket model, proprietary aerospace components, high margins, and recurring revenue streams. TDG’s stock price has appreciated by approximately 1.56% since our coverage. OppCost shares a similar perspective with Howmet Aerospace (HWM) but emphasizes its role as a mission-critical, sole-source supplier and growth from aerospace and industrial gas turbine demand.

Howmet Aerospace Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 57 hedge fund portfolios held HWM at the end of the third quarter which was 57 in the previous quarter. While we acknowledge the risk and potential of HWM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HWM and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.