Key Stats for Howmet Aerospace Stock
- Current Price: $231.53
- Target Price (Mid): ~$409
- Street Target: ~$337
- Potential Total Return: ~77% (to year-end 2030)
- Annualized IRR: ~14% / year
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What Happened?
Howmet Aerospace (HWM) lost 10.70% on Tuesday, September 8, closing at $231.53. The trigger was not its own results, which were excellent. It was a deal across the table: GE Aerospace agreed to buy Consolidated Precision Products, a rival casting maker, for $11.75 billion. GE is one of Howmet’s largest customers, so investors read the move as a customer deciding to make more of its own critical parts. The drop erased roughly $11 billion of Howmet’s market value, almost the entire price GE paid for CPP.
That reaction is about one thing: bargaining power. If GE can pour castings in-house, does Howmet lose pricing leverage and future program share over time? The fear is real, but it collides with a company that just raised guidance across the board and controls more than half the global market for industrial gas turbine blades.
A Customer Just Bought a Competitor
GE will fund the purchase with $7 billion in cash plus new debt, close in the second half of 2027, and it valued CPP at about 18 times 2027 EBITDA, including synergies. CPP builds castings for GE’s own LEAP, GEnx, and military engine programs, so GE is bringing a long-time supplier inside the tent. Jefferies called the deal an “impactful move” in the blades-and-vanes competitive landscape, and the read-through to Howmet was immediate.
The deal transfers no Howmet contracts and touches nothing in the near-term income statement. It introduces a slower question about the next decade: whether GE steers future casting work, or next-generation programs, toward a supplier it now controls. Those risks build over the years, and the agreement still faces regulatory review. The market repriced a probability, and it did so violently because Howmet was priced for very little to go wrong. It also lands on a bruised stock. In late August, Howmet slid after Elon Musk said SpaceX intends to cast turbine blades in-house, a separate scare that had already dented sentiment before the GE news hit.
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The Business That Just Got Cheaper Is Firing on Every Cylinder
Second quarter revenue rose 24% to $2.55 billion, up 21% organically, the fastest growth since early 2023. Earnings per share climbed 46% to $1.33, beating the Street’s $1.25. Adjusted EBITDA margin expanded 340 basis points to 32.1%, free cash flow hit $479 million, and management raised full-year guidance again, to $10.05 billion in revenue and $5.27 in EPS.
The gas turbine business, the exact market that GE and SpaceX fear, grew 38%. Howmet’s position there is not ordinary. On the earnings call, CEO John Plant was blunt: “Howmet has a market share in excess of 50% globally for turbine blades in the IGT market. And therefore, the growth of that market is dependent upon our willingness to invest, which we’re doing.” A supplier that sets the pace of its own market’s expansion is not about to be dislodged by a deal that closes in 2027.
Plant noted that a fresh capacity commitment today would not deliver equipment until 2028 at the earliest, given multi-year lead times on casting machines. Howmet is also climbing the technology ladder, from equiaxed to directionally solidified to single-crystal blades, while building multi-chemistry coating capacity that deposits several exotic chemistries at once, inside and outside the blade. A new entrant can announce in-house casting in an afternoon.
Even after the drop, Howmet trades near 49.9 times trailing earnings and about 44 times guided 2026 EPS, a multiple that assumes years of clean execution. The premium over peers is real: Howmet’s forward P/E near 39.7 sits above RTX at roughly 27 and Safran near 28, and roughly in line with GE itself near 40. A dominant, higher-margin, faster-growing supplier can justify a premium.
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TIKR Advanced Model Analysis
- Current Price: $231.53
- Target Price (Mid): ~$409
- Potential Total Return: ~77% (to year-end 2030)
- Annualized IRR: ~14% / year
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The model rests on two revenue drivers: commercial aerospace build-rate increases feeding new engines and higher-margin spares, and the gas turbine ramp tied to data-center electricity demand, where Howmet holds its 50%-plus blade share. The margin driver is operating leverage, with incremental revenue converting to EBITDA at 46% last quarter, plus CAM synergies building through 2027. The mid case assumes revenue compounds around 10% annually with net margins expanding toward 24%.
The primary risk is exactly what the market flagged: if GE’s ownership of CPP or SpaceX’s ambitions erode Howmet’s pricing power or program share, the growth rate and the premium multiple compress together. The upside is that Howmet’s technology lead and capacity head start keep its share durable, making today’s price a discount on a compounder. The downside is that a stock near 44 times earnings cannot absorb even a slow leak in its position, and the multiple keeps giving back ground while the threats stay in the headlines.
Conclusion
CEO John Plant presents at the Jefferies Global Industrials Conference on September 9, the morning after the drop, and investors want one thing: how he frames GE’s move on casting supply. A specific answer on contract protection and capacity lead times would suggest the selloff overshot; vague reassurance would suggest the market is right to worry. The larger marker comes in early November, when management has promised its first look at 2027 revenue. Plant signaled it would come in above 2026’s $10.05 billion.
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Should You Invest in Howmet Aerospace?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
