Wall Street Scrambles to Upgrade Howmet Aerospace Stock (HWM). Here’s Why

Analysts across Wall Street are scrambling to upgrade Howmet Aerospace’s HWM -1.06% ▼ stock after the company held its latest investor day.

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Brokerages and banks are applauding Howmet Aerospace after management highlighted strong aerospace demand, technology advantages, and room for future margin expansion. RBC Capital Markets RY -0.41% ▼ reiterated its Buy-equivalent outperform rating on HWM stock and raised its price target to $300 from $275, saying the company remains well-positioned in aircraft engines.

Investment banks Jefferies Financial Group JEF -3.16% ▼ and Morgan Stanley MS -1.65% ▼ also reiterated Buy ratings on Howmet’s stock, noting that defense demand also remains strong. Jefferies placed a $315 price target on HWM stock, while Morgan Stanley put a $280 target on the shares.

The Bull Case for HWM Stock

Management at Howmet Aerospace highlighted strong end-market trends, including 9% growth in commercial aircraft deliveries through 2030. Management also expects revenue from industrial gas turbines to more than double within five years from roughly $1 billion in 2025.

RBC said the company continues to emphasize its ability to grow faster than its end markets through share gains, pricing, capacity expansion and manufacturing improvements. The brokerage also highlighted the company’s Whitehall casting facility and its vertically integrated production process as key competitive advantages.

Jefferies said the investor day reinforced its positive view on the stock, pointing to what it called a “perfect storm” of demand across commercial aerospace, gas turbines and defense programs.

The brokerage expects strong growth in aircraft engine components as new aircraft production increases and airlines order more spare parts. It also said demand for gas turbines could rise as electricity consumption from data centers grows.

Jefferies added that automation, digital manufacturing tools and materials science expertise could support higher production yields and margins across the company’s businesses.

Morgan Stanley reiterated its Overweight rating, saying Howmet remains positioned for above-industry growth and margin expansion. The firm cited strong barriers to entry in the aircraft engine supply chain and the company’s ability to improve productivity through automation and data-driven manufacturing.

While the company did not issue new financial targets at the event, analysts said management reinforced its strategy of investing in technology and capacity to capture growth across aerospace and power markets.

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