Howmet Aerospace Inc. (HWM) PT Raised to $165 at Benchmark

Benchmark analyst Josh Sullivan raised the price target on Howmet Aerospace Inc. (NYSE: HWM) to $165.00 (from $135.00) while maintaining a Buy rating.

The analyst commented, "We are raising our PT to $165 (26x FY26 EV/EBITDA) from $135 given 1) 1Q25 performance and raised FY25 guidance, 2) Conservative approach to aerospace OEM ramp time-line within guidance, 3) Upside optionality should Boeing/Airbus achieve announced rates, and 4) pricing/utilization/share gains driving margins longer-term. HWM put up a solid beat for 1Q25 with record cash flow, repurchased $125M of stock, and is benefiting to a small degree from the SPS fire. Further, HWM is “more optimistic” on Boeing (BA-Buy) build rates, and raised 737-MAX assumptions from 25/month to 28/month which is still below BA’s stated goals of 38/month. HWM aftermarket spares exposure continues to be robust, while non-consumable components destocking is within guidance assumptions. This dynamic puts HWM in a nice position when slower to recover markets such as wide-body do eventually engage. From our perspective the margin profile of the Fastener segment has been impressive, and further, this is baseload related vs. SPS share gains which while helpful are smaller. Net-net, HWM provides a haven of safety in volatile markets, upside optionality, guidance incorporates realities of fragile OEM builds, and increasing cash generation has few homes other than buybacks."

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