HWM
Howmet Aerospace Inc.$258.84
Sell
Target $191.46
Report: Mar 07, 2026Industrials • Industrial - Machinery • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$258.84-26.0%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$191.46
(26% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$267.31
52 Week Low$105.04
Avg. 3 Month Volume2.64M
Efficiency
LTM Gross Margin34.2%
LTM EBITDA Margin27.6%
LTM EBIT Margin24.1%
LTM Operating Margin24.8%
LTM ROA13.7%
LTM ROE29.7%
LTM ROIC26.6%
LTM ROCE21.4%
Capital Structure
Market Cap (MM)$92.4B
Enterprise Value (MM)$94.7B
Shares Outstanding404.00M
Total Debt (MM)$3.05B
Cash & Equivalents (MM)$742.00M
LTM Net Debt (MM)$2.31B
LTM Net Debt/EBITDA1.0x
Growth
TTM Rev. Growth11.1%
Last 3-Yr Rev. CAGR13.4%
Last 3-Yr EBITDA CAGR27.4%
Last 3-Yr EPS CAGR49.9%
Valuation
Street Target Price$272.58
LTM EV/Revenue11.5x
LTM EV/Gross Profit33.6x
LTM EV/EBIT47.6x
LTM EV/EBITDA41.6x
LTM P/E61.3x
LTM EV/FCF66.2x
LTM P/FCF64.6x
LTM P/TB13.8x
LTM P/B17.3x
Dividend Yield0.2%
Payout Ratio12.3%
Executive SummarySituation: Current price is $258.84 versus fair value $191.46 (-26.0% expected return), and valuation confidence is stable. Debate: Bull case depends on Multiple Compression toward Peer Medians. Bear case centers on Structural Multiple Re-Rating. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
1. IGT demand is expected to double to $2B in 3-5 years driven by data center power needs. 2. Spares mix expansion to 21% provides a high-margin floor and recurring revenue stream. 3. Exceptional capital allocation, with incremental ROIC reaching 117.8%.
Bear Case
1. Extreme valuation at 46.7x EBITDA vs. 26.9x historical average. 2. Massive insider selling, including $125.5M by the CEO, suggests a local peak. 3. Margin pressure from 1,500 new hires and $453M in record CapEx could disappoint if OEM build rates stall.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Multiple Compression toward Peer Medians. As the 'AI-IGT' hype cools, the stock is likely to de-rate from its current 46.7x EBITDA toward th...
Near-Term (0-6 months)Impact: Moderate
Boeing 737 MAX Production Delays. Continued supply chain and regulatory issues at Boeing could force Howmet to lower its Engine Products gui...
Long-Term (18+ months)Impact: Moderate
Howmet is relevant for analysis now because it is trading at all-time high valuation multiples while insiders are selling at an unprecedente...
Primary Risks
Concern: Medium
Structural Multiple Re-Rating. The biggest risk to the 'Sell' thesis is that the market permanently re-values aerospace suppliers as high-gr...
Concern: Low
M&A Accretion. The $1.8B CAM acquisition could be more accretive than modeled, providing an inorganic boost to EPS that offsets multiple com...
Concern: Medium
The stewardship verdict is mixed. While operational execution and capital allocation are top-tier, the lack of 'skin in the game' is concern...
Recent Activity
2026-02-12SEC Filing (8-K)
+6.04%Howmet Aerospace reported record Q4 2025 revenue of $2.2B, up 15% YoY, with adjusted EPS up 42% to $1.05 and full year revenue of $8.3B, up 11% YoY.
2025-07-31SEC Filing (8-K)
-6.44%Howmet Aerospace reports record Q2 2025 revenue of $2.05 billion, up 9% year-over-year.
2025-05-01SEC Filing (8-K)
+6.82%Howmet Aerospace reports record Q1 2025 revenue of $1.94 billion, up 6% year-over-year.
2024-11-06SEC Filing (8-K)
+12.43%Howmet Aerospace reports Q3 2024 revenue of $1.84 billion, up 11% year over year, with strong profit growth and debt reduction.
2024-07-30SEC Filing (8-K)
+13.23%Howmet Aerospace reports record Q2 2024 revenue of $1.88 billion, up 14% year over year, with strong profit growth and increased dividend.
Valuation Table
9.8/10Decision Grade
Scenario Range
$129
Bear
$188
Base
$239
Bull
$259