A strong stock as of late has been Howmet (HWM). Shares have been marching higher, with the stock up 20.1% over the past month. The stock hit a new 52-week high of $258.83 in the previous session. Howmet has gained 25.9% since the start of the year compared to the 12.7% move for the Zacks Aerospace sector and the 12.9% return for the Zacks Aerospace - Defense industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 12, 2026, Howmet reported EPS of $1.05 versus consensus estimate of $0.97.
For the current fiscal year, Howmet is expected to post earnings of $4.55 per share on $9.16 in revenues. This represents a 20.69% change in EPS on a 10.98% change in revenues. For the next fiscal year, the company is expected to earn $5.51 per share on $10.36 in revenues. This represents a year-over-year change of 21.26% and 13.1%, respectively.
Valuation Metrics
While Howmet has moved to its 52-week high over the past few weeks, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Howmet has a Value Score of F. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 56.8X current fiscal year EPS estimates, which is a premium to the peer industry average of 25.7X. On a trailing cash flow basis, the stock currently trades at 57.1X versus its peer group's average of 19.4X. Additionally, the stock has a PEG ratio of 2.57. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Howmet currently has a Zacks Rank of #2 (Buy) thanks to a solid earnings estimate revision trend.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Howmet fits the bill. Thus, it seems as though Howmet shares could have potential in the weeks and months to come.
How Does HWM Stack Up to the Competition?
Shares of HWM have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is MTU Aero Engines AG (MTUAY). MTUAY has a Zacks Rank of #2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. MTU Aero Engines AG beat our consensus estimate by 5.88%, and for the current fiscal year, MTUAY is expected to post earnings of $12.87 per share on revenue of $10.06 billion.
Shares of MTU Aero Engines AG have gained 6.4% over the past month, and currently trade at a forward P/E of 18.42X and a P/CF of 18.91X.
The Aerospace - Defense industry is in the top 37% of all the industries we have in our universe, so it looks like there are some nice tailwinds for HWM and MTUAY, even beyond their own solid fundamental situation.
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Howmet Aerospace Inc. (HWM): Free Stock Analysis Report MTU Aero Engines AG (MTUAY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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