Howmet's Commercial Aerospace Growth Picks Up: A Sign of More Upside?

Howmet Aerospace Inc. HWM continues to strengthen its position in the commercial aerospace market, which remains its primary growth driver at the moment.

This sustained strength reflects solid momentum in global air travel, which persisted through 2024 and continues into 2025. This strength in the commercial aerospace market has been driven by an increase in wide-body aircraft orders, encouraging original equipment manufacturers (OEMs) to increase their spending levels. For Howmet, this trend is particularly beneficial as higher aircraft utilization drives greater demand for maintenance parts and products that it produces. In the first quarter of 2025, revenues from the commercial aerospace market rose 9% year over year, constituting 52% of HWM’s total business.

Airlines are investing heavily in greener technologies as sustainability has become a key focus in aviation. The rise in HWM’s revenues was attributed to growing popularity for new, more fuel-efficient aircraft, which, in turn, increased demand for its engine spares. Howmet remains well-positioned to capitalize on the favorable market dynamics, with the commercial aerospace sector continuing to demonstrate resilience and growth. Despite strong year-over-year growth, the commercial aerospace market has been facing a few challenges. The recovery in Boeing 787 and Airbus A350 production has been slower than expected due to delays and supply-chain disruptions.

Performance of HWM’s Peers in the Commercial Aerospace Market

Among its major peers, RTX Corporation RTX reported 8% organic sales growth in the first quarter of 2025. This growth was largely driven by strength in the commercial aerospace market, where RTX Corp. saw double-digit gains in aftermarket sales and low-single-digit growth in OEM sales. The improvement in commercial aerospace sales boosted RTX’s Collins Aerospace and Pratt & Whitney segments. Rising aircraft utilization and demand for sustainable technologies are supporting RTX Corp.’s growth.

GE Aerospace GE is benefiting from solid demand for LEAP, GEnx & GE9X engines and services within the Commercial Engines & Services business. This growth is supported by increasing air traffic, fleet renewal and expansion activities. During the first quarter of 2025, GE Aerospace signed new deals with three major customers. ANA Holdings ordered more than 75 LEAP engines and selected GE to supply GEnx engines for 18 new Boeing 787 aircraft. Malaysia Aviation Group placed an order for 60 LEAP engines and spare parts for its Boeing 737 MAX planes. 

GE Aerospace also received an order from Korean Air for GEnx and GE9X engines to power up to 50 wide-body Boeing jets. These contracts underscore GE’s role in driving the growth of the commercial aerospace market globally.

HWM's Price Performance, Valuation and Estimates

Shares of Howmet have surged 104% in the past year compared with the industry’s growth of 19.9%.

From a valuation standpoint, HWM is trading at a forward price-to-earnings ratio of 46.12X, above the industry’s average of 26.59X.

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

The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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

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