’Reddit is built for this moment’ - Stock soars on crushed earnings
On Monday, Benchmark analyst Josh Sullivan increased the price target for Howmet Aerospace Inc . (NYSE:HWM) to $135, up from the previous $85, while maintaining a Buy rating on the stock. The aerospace manufacturer, now valued at nearly $49 billion, has demonstrated remarkable performance with a 95% return over the past year. Sullivan’s assessment is based on several factors indicating a robust outlook for the company. According to InvestingPro data, Howmet Aerospace has achieved a perfect Piotroski Score of 9, indicating exceptional financial strength. The company is seen as a stable investment, particularly in the current market conditions, with FY25 guidance being conservatively set and reaffirmed.
Sullivan highlighted that Howmet Aerospace stands to benefit from the recent SPS fire, which has constrained the fastener market, presenting Howmet with the chance to gain a larger market share. Such shifts in market share are often enduring, as OEMs tend to value supply chain dependability more than cost, especially in the aerospace industry.
The analyst also pointed out that despite uncertainties related to tariffs, the Engine Products division of Howmet Aerospace is expected to maintain its momentum. This outlook is supported by the current supply chain challenges noted by the Airbus CEO, who referred to them as the company’s most pressing commercial hurdle.
Howmet Aerospace’s conservative approach to FY25 guidance, which was established at the start of the year and factored in only a modest increase in the 737-MAX production rate, positions the company well to navigate potential market uncertainties. Benchmark’s earnings estimate for the first quarter of FY25 is $0.78 per share, which is a cent higher than the consensus estimate of $0.77.
In summary, the revised price target reflects a positive evaluation of Howmet Aerospace’s ability to capitalize on current market opportunities and withstand economic headwinds, with an emphasis on the company’s potential for share gain and operational strength.
In other recent news, Howmet Aerospace reported several significant developments impacting its financial outlook and market position. Fitch Ratings upgraded Howmet Aerospace’s credit ratings to ’BBB+’ with a stable outlook, citing improved credit metrics and strong free cash flow generation. This upgrade follows Howmet’s strategic deleveraging actions and robust demand expectations in the aerospace sector. Meanwhile, Wells Fargo (NYSE:WFC) downgraded Howmet Aerospace’s stock rating to Equal Weight, expressing concerns over the company’s high valuation amidst a slowing economic growth environment. Despite the downgrade, Wells Fargo maintained a price target of $118.00, indicating some confidence in the stock’s current valuation.
JPMorgan, however, reaffirmed its Overweight rating with a $130.00 price target, viewing Howmet’s recent invocation of force majeure due to tariffs as a strategic move to protect earnings. In another analyst action, Morgan Stanley (NYSE:MS) increased its price target for Howmet Aerospace to $155, maintaining an Overweight rating and highlighting the company’s potential benefits from the aerospace sector’s growth. Howmet Aerospace’s proactive measures in response to tariffs and its strategic positioning in the aerospace market underscore its resilience and adaptability. These developments are being closely monitored by investors, who are keen to see how Howmet navigates the evolving economic landscape.
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