Howmet Aerospace (NYSE:HWM) Issues Earnings Results, Beats Expectations By $0.09 EPS

Key Points

• Howmet beat third-quarter expectations: Adjusted EPS reached $1.46, $0.09 above consensus, while revenue rose 29.4% year over year to $2.70 billion. Adjusted EBITDA increased 43% to $879 million, supported by strong aerospace, gas turbine and defense demand.
• Management raised its outlook: Full-year 2026 guidance now calls for $10.3 billion in revenue, $5.50 in EPS and approximately $2 billion in free cash flow. Howmet also projects about $11.5 billion of revenue in 2027, representing roughly 12% growth.
• Shareholder returns expanded, but valuation and execution risks remain: The company authorized an additional $5 billion in buybacks and increased its quarterly dividend 17% to $0.14 per share. Elevated fuel costs, possible travel disruptions, uncertain defense contracts and a high earnings multiple could weigh on future performance.

Howmet Aerospace (NYSE:HWM - Get Free Report) posted its quarterly earnings results on Thursday. The company reported $1.46 earnings per share for the quarter, topping analysts' consensus estimates of $1.37 by $0.09, FiscalAI reports. Howmet Aerospace had a return on equity of 33.91% and a net margin of 20.52%. The business had revenue of $2.70 billion for the quarter, compared to the consensus estimate of $2.59 billion. During the same period in the prior year, the business earned $0.95 EPS. The firm's revenue for the quarter was up 29.4% on a year-over-year basis.

Here are the key takeaways from Howmet Aerospace's conference call:

• Q3 results exceeded guidance: Revenue rose 29% year over year to $2.7 billion, adjusted EBITDA increased 43% to $879 million, and adjusted EPS grew 54% to $1.46, with a 32.5% EBITDA margin.
• Strong demand across commercial aerospace, gas turbines, defense and commercial transportation drove growth; industrial gas turbine revenue increased 45%, while commercial aerospace rose 32% and spares revenue grew 30% to approximately $570 million.
• Management raised full-year 2026 guidance to $10.3 billion of revenue, $3.33 billion of EBITDA, $5.50 of EPS and approximately $2 billion of free cash flow, and initiated a 2027 revenue outlook of about $11.5 billion, representing roughly 12% growth.
• Capital returns remain substantial, with $1.1 billion of share repurchases year to date, a 17% dividend increase and a new $5 billion buyback authorization; net leverage ended the quarter at approximately 1.3 times EBITDA.
• Management cited risks from elevated fuel prices and potential winter travel disruption, while defense upside from missile production and inventory replenishment remains uncertain pending contract finalization and greater clarity on the 2027 defense budget.

Howmet Aerospace Stock Performance

Shares of NYSE:HWM traded up $10.45 during midday trading on Thursday, reaching $205.64. The company had a trading volume of 5,826,917 shares, compared to its average volume of 3,603,216. The company's 50 day moving average price is $230.48 and its 200 day moving average price is $248.59. The company has a current ratio of 1.82, a quick ratio of 0.87 and a debt-to-equity ratio of 0.71. The stock has a market cap of $82.28 billion, a P/E ratio of 42.90, a P/E/G ratio of 1.75 and a beta of 1.21. Howmet Aerospace has a 52-week low of $183.52 and a 52-week high of $310.00.

Howmet Aerospace Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Wednesday, November 25th. Stockholders of record on Friday, November 6th will be paid a dividend of $0.14 per share. This represents a $0.56 dividend on an annualized basis and a dividend yield of 0.3%. The ex-dividend date is Friday, November 6th. Howmet Aerospace's payout ratio is presently 12.07%.

Analyst Upgrades and Downgrades

A number of brokerages have recently issued reports on HWM. Citigroup reiterated a "buy" rating on shares of Howmet Aerospace in a report on Tuesday. UBS Group raised their price target on shares of Howmet Aerospace from $299.00 to $326.00 and gave the company a "neutral" rating in a research report on Friday, August 7th. Weiss Ratings upgraded Howmet Aerospace from a "buy (b-)" rating to a "buy (b)" rating in a research note on Wednesday, August 19th. Morgan Stanley reissued an "overweight" rating and set a $335.00 price objective on shares of Howmet Aerospace in a report on Monday, August 10th. Finally, Guggenheim started coverage on Howmet Aerospace in a research note on Monday, September 14th. They issued a "buy" rating and a $350.00 price objective for the company. One research analyst has rated the stock with a Strong Buy rating, eighteen have issued a Buy rating and four have issued a Hold rating to the company. According to MarketBeat.com, Howmet Aerospace presently has a consensus rating of "Moderate Buy" and an average target price of $310.29.

Trending Headlines about Howmet Aerospace

Here are the key news stories impacting Howmet Aerospace this week:

• Positive Sentiment: Quarterly results exceeded expectations: Adjusted EPS was $1.46 versus the $1.37 consensus estimate, while revenue rose 29% year over year to $2.70 billion, ahead of the $2.59 billion forecast. EPS increased from $0.95 a year ago. Howmet Surpasses Q3 Earnings and Revenue Estimates
• Positive Sentiment: Profitability and cash generation strengthened: Adjusted EBITDA increased 43% to $879 million, with the margin expanding to 32.5%. Operating cash flow reached $709 million and free cash flow rose 33% to $562 million, supporting shareholder returns. Howmet Aerospace Reports Third Quarter 2026 Results
• Positive Sentiment: Management raised its outlook: Howmet increased full-year 2026 earnings guidance and forecast approximately $11.5 billion in 2027 revenue, representing roughly 12% year-over-year growth. Fourth-quarter adjusted EPS is expected to range from $1.49 to $1.51. Howmet Increases 2026 Earnings Guidance
• Positive Sentiment: Shareholder returns expanded: The board authorized an additional $5 billion for stock repurchases, bringing total authorization to approximately $5.4 billion. Howmet also repurchased $500 million of shares during the quarter and increased its quarterly dividend by 17% to $0.14 per share. Howmet Updates Outlook and Increases Repurchase Plan
• Neutral Sentiment: Valuation remains a consideration: Despite the favorable outlook and growth in aerospace-related demand, HWM trades at a relatively high earnings multiple, which could limit further gains if future results or guidance fail to meet elevated expectations. Is Howmet Aerospace Fairly Valued?

About Howmet Aerospace

Howmet Aerospace Inc NYSE: HWM is a global manufacturer of advanced engineered products and materials primarily serving the aerospace, defense, commercial transportation and industrial markets. The company develops components designed to operate in demanding environments where strength, durability and weight reduction are important.

Howmet's product portfolio includes aircraft engine components, airframe structures, titanium and nickel-based forgings, fastening systems and wheels for commercial vehicles.

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