Key Stats for HWM Stock
- 6-Month Performance: 49%
- 52-Week Range: $105 to $263
- Valuation Model Target Price: $302
- Implied Upside: 15%
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What Happened?
Howmet Aerospace stock has surged about 49% over the last 6 months, recently trading near $263 per share as investors repriced the stock following record earnings, accelerating gas turbine demand, and expanding margins.
Shares recently touched a new 52 week high near $263, reflecting sustained institutional demand and strong fundamental momentum.
The rally was driven by record fourth quarter results and confident 2026 guidance that reinforced durable growth. Q4 revenue rose 15% to $2.17 billion, EBITDA increased 29% to $653 million, and EPS climbed 42% to $1.05, while full year EBITDA margin reached a record 29% and free cash flow hit $1.43 billion.
CEO John Plant called it “an extremely solid quarter,” as gas turbine revenue surged 32%, defense aerospace grew 20%, and combined commercial, defense, and gas turbine spares jumped 33% to $1.7 billion.
Management guided 2026 revenue to $9.1 billion, EBITDA to $2.76 billion, EPS to $4.45, and free cash flow to $1.6 billion.
Investors are responding to the quality and visibility of that growth. Spares now represent 21% of total revenue versus 17% in 2024, supporting higher margin recurring cash flow, while management expects the roughly $1 billion gas turbine business to double over the next 3 to 5 years as electricity demand for data centers accelerates.
Capital spending is expected to remain elevated at about $470 million in 2026 to support aerospace and power market expansion.
Institutional positioning adds further context. NEOS Investment Management increased its stake by 65% to 55,392 shares worth about $11 million, while Alberta Investment Management raised its position by 18% and Public Sector Pension Investment Board added 13%. Kovitz Investment Group trimmed its stake by 32%, and Citigroup reduced its position by 18% to 644,216 shares worth about $126 million.
EVP Neil Edward Marchuk sold 45,150 shares on February 18 at $252 per share for approximately $11 million, reducing his stake by 30%, though institutional investors still own about 90% of shares outstanding, indicating broad long term support.
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Is HWM Undervalued?
Under valuation assumptions, the stock is modeled using:
- Revenue Growth (CAGR): 11%
- Operating Margins: 29%
- Exit P/E Multiple: 42x
Revenue growth is anchored in sustained commercial aerospace production increases and elevated engine spares demand as global flight hours rise.
The record OEM aircraft backlog stretching into the next decade supports multi year build visibility, while defense aerospace remains strong across F-35 and other programs.
Gas turbines are emerging as a major structural growth driver. Management expects the roughly $1 billion gas turbine business to double over the next 3 to 5 years as electricity demand for data centers accelerates.
Recently completed customer contracts and long term supply agreements add further revenue visibility in this segment.
Margin expansion reflects mix shift toward higher value engine components and spares, which carry stronger pricing power and recurring characteristics.
With net debt to EBITDA at about 1x and free cash flow conversion near 90%, the company maintains flexibility to fund growth investments, repurchase shares, and pursue disciplined acquisitions.
Based on these inputs, the model estimates a target price of $302, implying about 15% upside from current levels near $263.
At current prices, Howmet appears moderately undervalued, with 2026 performance likely driven by aerospace build rate execution, continued spares growth, gas turbine capacity expansion, and sustained margin discipline rather than multiple expansion alone.
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How Much Upside Does HWM Stock Have From Here?
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All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
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