Howmet Raises EPS Outlook for 2025: Is This Expectation Valid?

Howmet Aerospace Inc. HWM raised its 2025 adjusted earnings per share (EPS) outlook following a solid first-quarter 2025 performance, reflecting confidence in its operational execution and exposure to flourishing aerospace markets.

The company increased its full-year EPS guidance to $3.36-$3.44 compared with $3.13-$3.21 expected earlier. After reporting an adjusted EPS of 86 cents in the first quarter (increasing 51% on a year-over-year basis), driven by strong cost discipline, favorable product pricing and a reduction in interest expense, the company gained confidence to raise its outlook.

Margin expansion played a critical role in the upward revision of the company’s earnings guidance. In the first quarter, HWM reported an adjusted EBITDA margin of 28.8%, up 480 basis points, driven by pricing strength and productivity gains. The Fastening Systems and Engineered Structures segments recorded adjusted EBITDA margin expansions of 710 and 720 basis points, respectively. Howmet has also raised its 2025 adjusted EBITDA margin outlook to 27.8–28.2%, up from 26.5% expected earlier.

Strength in the aerospace markets also continues to anchor HWM’s growth outlook. Revenues from the commercial aerospace market increased 9% year over year in the first quarter while that from the defense aerospace market surged 19%.

With sustained demand in the aerospace markets and improving margins, HWM seems to be in a good position to meet its 2025 goals. Although some challenges remain, like softness in the commercial transportation market, the company’s strong first-quarter results suggests that it is well-prepared to manage risks and keep growing in the near term.

Earnings Snapshot of HWM’s Peers

Among its major peers, RTX Corporation RTX reported adjusted earnings of $1.47 per share in the first quarter of 2025. RTX Corp.’s bottom line improved 9.7% from the year-ago quarter’s level of $1.34. For 2025, RTX Corp. expects adjusted EPS to be in the band of $6.00-$6.15. 

GE Aerospace GE delivered adjusted earnings of $1.49 per share in the first quarter of 2025. GE Aerospace’s bottom line surged 60% year over year. For 2025, GE Aerospace expects adjusted earnings to be in the range of $5.10-$5.45 per share.

HWM's Price Performance, Valuation and Estimates

Shares of Howmet have surged 102.1% in the past year compared with the industry’s growth of 13.7%.

From a valuation standpoint, HWM is trading at a forward price-to-earnings ratio of 44.91X, above the industry’s average of 26.42X. Howmet carries a Value Score of F.

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.

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