HWM

Howmet Aerospace (HWM) and ATI Inc. (ATI) are both benefiting from rising geopolitical tensions and increased defense spending. HWM saw commercial aerospace revenues jump 28% and raised 2026 guidance to $10.00-$10.10 billion, while ATI achieved 13% aerospace and defense sales growth with a record $4.4 billion backlog and 36% defense revenue surge. Both stocks carry Zacks Rank #1 ratings, though ATI's lower forward valuation (26.42X) compared to HWM (31.08X) makes it relatively more attractive despite both trading above five-year median valuations.

Howmet (HWM) stock declined 3.82% to $211.63, underperforming the broader market despite positive earnings expectations. The aerospace and engineered products company is rated a Zacks Rank #1 Strong Buy with consensus estimates projecting 44.21% EPS growth and 23.98% revenue growth for the upcoming quarter. The company will report earnings on October 29, 2026.

ATI Inc. reported first-half 2026 adjusted free cash flow of $143.2 million and raised its full-year 2026 forecast to $550-$600 million from $465-$525 million, driven by stronger operating performance and healthy aerospace and defense demand. The company returned $470 million to shareholders through buybacks in 2025 with $495 million remaining in authorization. Peers Carpenter Technology and Howmet Aerospace also reported strong free cash flow generation.

Howmet Aerospace (HWM) is experiencing strong momentum in commercial aerospace with Q2 2026 revenues from this segment jumping 28% year-over-year and accounting for 53% of total business. Engine Products revenues surged 32% to $1.37 billion and Fastening Systems rose 37% to $589 million.

The company's $1.8 billion acquisition of Stanley Black & Decker's CAM business and continued production ramps from Boeing and Airbus are expected to sustain demand. However, HWM trades at a premium valuation of 36.63X forward P/E versus the industry average of 27.53X and carries a Zacks Rank #3 (Hold) rating.

Howmet (HWM) gained 1.21% to $225.26, outperforming the S&P 500's 0.6% gain. Despite the daily rally, the stock has declined 2.35% over the past month as the Aerospace sector struggles with an 8.98% loss.

Analysts expect strong earnings growth with projected EPS of $1.36 (up 43.16% YoY) and revenue of $2.59 billion (up 23.98% YoY) when the company reports on October 29, 2026. Howmet holds a Zacks Rank #1 (Strong Buy) rating, though it trades at a premium valuation with a Forward P/E of 41.75 versus the industry average of 20.87.

Howmet Aerospace (HWM) delivered robust Q2 2026 results with adjusted EBITDA surging 39% to $817 million and margins expanding 340 bps to 32.1%, driven by strong aerospace and gas turbine demand. The company raised its 2026 revenue guidance to $10.0-$10.1 billion and expects adjusted EBITDA margins of 32.1-32.2%. Peers Textron and RTX showed mixed margin performance, with RTX benefiting from aerospace deliveries while Textron faced margin pressure.

Howmet (HWM) declined 3.82% on October 7, 2026, significantly underperforming the S&P 500's 0.22% loss. Despite a Zacks Rank #2 (Buy) rating and strong earnings growth projections for Q3 2026 (43.16% EPS increase), the stock trades at a premium valuation with a Forward P/E of 43.44 versus the industry average of 21.54. Earnings are scheduled for October 29, 2026.

Howmet (HWM) closed at $231.6 with Wall Street analysts setting a mean price target of $325.41, suggesting 40.5% upside potential. The stock has a Zacks Rank #2 (Buy) rating, supported by positive earnings estimate revisions. However, the article cautions that price targets can be misleading and should not be the sole basis for investment decisions, as analysts often set overly optimistic targets due to business incentives.

In a comparison of two Aerospace-Defense sector stocks, Lockheed Martin (LMT) and Howmet (HWM), both holding a Zacks Rank #2 (Buy), LMT emerges as the superior value option. LMT has a forward P/E of 16.64 and PEG ratio of 1.10, compared to HWM's 43.06 and 2.07 respectively. LMT received a Value grade of B versus HWM's D grade, making it the more attractive choice for value investors.

Howmet (HWM), an aerospace and engineered products manufacturer, closed at $228.51 with a Zacks Rank #2 (Buy) rating. The company is expected to report 43.16% EPS growth and 23.98% revenue growth in the upcoming quarter. However, the stock trades at a Forward P/E of 42.43, significantly above the industry average of 23.45, and has declined 10.59% over the past month.

Howmet (HWM) is highlighted as a compelling growth stock opportunity, combining a Growth Score of B with a Zacks Rank #2 (Buy). The company demonstrates exceptional earnings growth of 41.4% expected this year, significantly outpacing the industry average of 17%, along with strong cash flow growth of 31.2% year-over-year. Positive earnings estimate revisions and robust historical performance metrics position the stock well for potential outperformance.

The Aerospace-Defense industry benefits from rising geopolitical tensions, higher military spending, and continued air-travel demand, though supply-chain constraints and labor shortages remain headwinds. GE Aerospace, RTX Corp., and Howmet Aerospace are highlighted as leading companies poised for growth, with all three carrying Zacks Rank #2 (Buy) ratings. However, the industry overall ranks #179 among 247 Zacks industries and has underperformed the S&P 500 by 31.2% over the past year.

The aerospace-defense industry is positioned for growth driven by rising geopolitical tensions, increased military spending, and defense modernization programs. However, the industry faces headwinds from supply-chain constraints, labor shortages, and higher operating costs. Three leading companies—GE Aerospace, RTX Corporation, and Howmet Aerospace—are highlighted as investment opportunities with strong earnings growth forecasts.

Boeing's ramp-up of 737 MAX production to 52-57 aircraft per month is a critical pivot point for its turnaround and will significantly benefit its aerospace supply chain partners. CEO Kelly Ortberg confirmed the supply chain is in good shape, with production delays related to Boeing's own wing manufacturing rather than supplier issues. As Boeing clears pre-built inventory and reaches higher production rates in 2027, suppliers' revenue, cash flow, and profitability are expected to improve substantially.

GE Aerospace is outperforming its Aerospace peers with a year-to-date gain of 1.9% compared to the sector's average loss of 12.2%. The stock holds a Zacks Rank #2 (Buy) with improving earnings outlook, as consensus estimates have moved 1.4% higher in the past quarter. Howmet also stands out as a top performer in the sector with a 7.8% year-to-date return and a Zacks Rank #1 (Strong Buy).

GE Aerospace is set to report Q3 2026 earnings on October 20 with expected EPS of $2.02 and revenues of $12.7 billion, representing 21.7% and 11.9% year-over-year growth respectively. Strong engine demand, aftermarket services, and defense orders are expected to drive results, supported by a $210+ billion backlog. However, elevated costs and supply chain constraints pose risks, and the stock trades at a premium valuation of 35.43X forward P/E compared to the industry average of 27.37X.

Parker-Hannifin's Aerospace Systems segment demonstrated robust performance with 13.3% organic revenue growth in fiscal Q4 2026 and orders up 18%. The segment's backlog reached a record $8.5 billion, driven by strong commercial aerospace and defense demand.

The company projects 7-10% organic sales growth for fiscal 2027 and issued bullish guidance expecting total sales to increase 5.5-8.5% year over year. Parker-Hannifin also agreed to acquire CIRCOR International's Commercial and Defense Aerospace business for $2.55 billion.

RBC Bearings' Aerospace & Defense segment revenues surged 36.9% in fiscal Q1 2027 to $225.4 million, driven by commercial aerospace growth (21.8%) and robust defense demand (64.6%). The company projects Q2 sales of $505-$515 million with 10.9%-13.1% year-over-year growth, supported by a $2.3 billion backlog and strong U.S. defense budgetary provisions.

ATI Inc. reported first-half 2026 adjusted free cash flow of $143.2 million, a significant improvement from a $50.2 million cash outflow in the prior year. The company raised its full-year 2026 adjusted free cash flow guidance to $550-$600 million from $465-$525 million, driven by strong aerospace and defense demand, contract pricing gains, and higher-value product focus. ATI stock has surged 122.1% over the past year and carries a Zacks Rank #1 (Strong Buy) rating.

GE Aerospace announced a $12 billion acquisition of Consolidated Precision Products (CPP), its largest deal since becoming independent in 2024. The acquisition brings precision casting in-house, expected to create cost synergies, improve operational efficiency, and provide supply chain advantages.

While the deal values CPP at 26x estimated 2027 EBITDA, effective valuation drops to 18x with synergies considered. Management expects the deal to be immediately accretive to earnings.