Howmet Aerospace Inc. HWM is poised to benefit from solid momentum across its businesses, focus on operational excellence and healthy liquidity position. The company remains focused on investing in growth opportunities and strengthening its long-term market position.

HWM, which has a market capitalization of $51.4 billion, currently carries a Zacks Rank #2 (Buy). Let’s delve into the factors that have been aiding the firm for a while now.

End-Market Strength: Howmet is witnessing persistent strength in the commercial aerospace market. Solid demand for engine products, supported by higher build rates, spares growth and robust backlogs, is driving the segment’s performance. Revenues from the commercial aerospace market increased 12.9% year over year in the fourth quarter of 2024, constituting 53% of its business.  

While the commercial aerospace market has remained a major driver, the defense side of the industry has also been witnessing positive momentum, cushioned by steady government support. The company has been witnessing robust orders for engine spares for the F-35 program and spares and new builds for legacy fighters. In the fourth quarter, revenues from the defense aerospace market increased 22% year over year, constituting 16% of its business.

Strong Liquidity Position: The company’s sound liquidity position is an added positive. Exiting the fourth quarter, Howmet’s cash equivalents and receivables were $564 million as against short-term maturities of $6 million. This implies that it has sufficient cash to meet its current debt obligations.

Shareholder-Friendly Policies: Howmet remains committed to increasing shareholders’ value through dividend payments and share repurchases. For instance, in 2024, it paid dividends worth $109 million and repurchased shares for $500 million. Also, in 2023, the company paid dividends of $73 million and repurchased shares worth $250 million. In July 2024, it hiked its dividend by 60% to eight cents per share (annually: 32 cents). As of Jan. 31, 2025, HWM’s total share repurchase authorization available was $2.15 billion.

Image Source: Zacks Investment Research

Year to date, the company’s shares have surged 16.1%, higher than the industry’s 1.5% growth.

Estimate Revisions: It’s worth noting that the Zacks Consensus Estimate for HWM’s 2025 earnings is pegged at $3.23 per share, indicating an increase of 1.9% from the 30-day-ago figure. The consensus estimate for 2026 earnings is pegged at $3.99 per share, indicating an increase of 0.5% from the year-ago period.