On Tuesday, Howmet Aerospace Inc. (NYSE:HWM (BMV:HWM)) received a positive outlook from BTIG, with the initiation of coverage and a Buy rating established alongside a price target of $95. The firm recognized Howmet Aerospace as a company that stands to gain significantly from the ongoing recovery in commercial aerospace and an increase in defense spending.
The analyst from BTIG highlighted Howmet's advantageous position, noting that the company is well-placed to benefit from the resurgence in air traffic following the pandemic. This is due in part to Howmet's versatile business model, which is not strictly tied to the production rates of original equipment manufacturers (OEMs), but also services the maintenance, repair, and overhaul (MRO) sector.
The endorsement comes amid lingering concerns about the ability of OEMs to ramp up production rates effectively. However, Howmet's strategy appears to shield it from these specific market challenges, offering a path to capitalize on the broader industry recovery.
The company's stock is now projected to reach the newly set price target, which suggests a confidence in Howmet's potential to thrive as the aviation sector rebounds. The target represents BTIG's estimation of the stock's value based on their analysis.
Investors may consider this new rating and price target as a reflection of Howmet Aerospace's current position in the market and its prospects for growth in the near future, particularly as the world continues to adjust to the new dynamics in air travel and defense expenditure post-COVID.
In other recent news, Howmet Aerospace has been making headlines with several financial firms adjusting their outlooks on the company's shares. KeyBanc Capital Markets, for instance, raised their price target from $70 to $90, maintaining an Overweight rating. This adjustment comes after a strong first quarter in 2024, where the company exceeded expectations in sales and margins. KeyBanc also increased its earnings estimates for the second quarter of 2024 to $0.61 per share, up from $0.58, and for the full years 2024 and 2025 to $2.40 and $3.00 per share respectively.
Argus, another financial firm, also raised its share target for Howmet Aerospace to $90 from $75, maintaining its Buy rating. The firm noted the company's resilience amidst the supply-chain crisis and anticipates rapid growth in earnings over the next three to four years. Similarly, Baird increased its price target from $74 to $84, citing robust growth prospects in the aerospace sector, while RBC Capital Markets raised the price target to $90.00, up from the previous $75.00, following a strong first-quarter earnings report.
Lastly, Goldman Sachs (NYSE:GS) maintained a Buy rating on Howmet Aerospace, setting a stock price target of $87.00. The firm highlighted the company's impressive first-quarter results for 2024, which surpassed consensus expectations across all major financial indicators. These recent developments underscore the positive outlook for Howmet Aerospace in the investment community.
InvestingPro Insights
Recent data from InvestingPro underscores the potential that BTIG sees in Howmet Aerospace (NYSE:HWM). With a market capitalization of $31.82 billion and a healthy revenue growth of 15.47% over the last twelve months as of Q1 2024, Howmet's financial stability is evident. The company's P/E ratio, standing at 37.28, may seem high, but it aligns with the near-term earnings growth, providing a PEG ratio of just 0.47—a sign that the stock might be undervalued relative to its earnings growth.
InvestingPro Tips highlight that Howmet has raised its dividend for three consecutive years, which could be attractive to income-seeking investors. Additionally, the company has been profitable over the last twelve months, with analysts predicting profitability to continue this year. This aligns with BTIG's positive outlook and suggests that Howmet's stock could be a compelling choice for investors looking at the aerospace sector.
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