Wells Fargo analyst Matthew Akers maintained a Buy rating on Howmet Aerospace (HWM – Research Report) today and set a price target of $60.00.
Matthew Akers has given his Buy rating due to a combination of factors that indicate Howmet Aerospace’s strong performance and promising outlook. The company’s Q4 earnings per share (EPS) excluding special items surpassed both the Wells Fargo model and the consensus, hinting at operational efficiency and robust financial health. Additionally, the company’s guidance for the 2024 fiscal year projects a top-line growth of 7%, with an impressive high-20s incremental EBITDA margin, suggesting confidence in continued growth and profitability.
Beyond the EPS beat, several other elements underpin the Buy rating; Howmet Aerospace’s segment adjusted EBITDA outperformed expectations on the back of a significant 14% top-line growth, driven mainly by a surge in commercial aerospace. Furthermore, the company’s free cash flow (FCF) outlook and proactive share repurchase program demonstrate a strong balance sheet and a shareholder-friendly capital allocation policy. The combination of a solid guidance range, substantial FCF, and strategic investments to support capacity growth in Engine Products all signal a positive trajectory for Howmet Aerospace, justifying Akers’ Buy recommendation.
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Howmet Aerospace (HWM) Company Description:
Arconic, Inc. engages in manufacturing and engineering of lightweight metals. It operates through the following segments: Engineered Products and Forgings (EP&F) and Global Rolled Products (GRP). The EP&F segment produces products that are used primarily in the aerospace, industrial, commercial transportation, and power generation end markets. The GRP segment produces aluminum sheet and plate, aluminum extruded and machined parts, integrated aluminum structural systems, and architectural extrusions used in the automotive, aerospace, building and construction, industrial, packaging, and commercial transportation end markets. The company was founded in 1888 and is headquartered in New York, NY.
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