Howmet Aerospace (HWM – Research Report), the Industrials sector company, was revisited by a Wall Street analyst on February 18. Analyst Sheila Kahyaoglu from Jefferies maintained a Buy rating on the stock and has a $74.00 price target.
Sheila Kahyaoglu has given her Buy rating due to a combination of factors concerning Howmet Aerospace’s financial and strategic position. Notably, Kahyaoglu highlights the company’s significant investment in engine capital expenditures, which is expected to yield high internal rates of return above 30% during an industry recovery phase. These investments are seen as a strategic move to solidify Howmet Aerospace’s long-term pricing power and market share gains. Additionally, she points out the conservative estimates for 2024 build rates and margins, alongside a well-managed balance sheet and an effective management team, which she believes position the company to trade at a premium to its current valuation.
Furthermore, Kahyaoglu’s analysis includes the expectation of revenue growth despite conservative production rate assumptions for the 737 aircraft. She observes that the company’s strong position in defense and industrial gas turbine (IGT) sectors, along with an anticipated increase in aerospace spare parts demand, should more than offset any potential headwinds. The report also notes the company’s capacity expansion in Engine Products, which is expected to contribute to revenue growth through price and share gains. Additionally, the company’s disciplined approach to cash deployment, with a focus on returning value to shareholders while maintaining a robust balance sheet, reinforces Kahyaoglu’s positive outlook and supports her Buy rating and increased price target for Howmet Aerospace’s stock.
Kahyaoglu covers the Industrials sector, focusing on stocks such as Boeing, General Electric, and Delta Air Lines. According to TipRanks, Kahyaoglu has an average return of 8.2% and a 62.66% success rate on recommended stocks.
In another report released today, Barclays also maintained a Buy rating on the stock with a $65.00 price target.
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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.
Read More on HWM:
- Jefferies aerospace/defense analysts to hold analyst/industry conference call
- Howmet Aerospace price target raised to $72 from $60 at Wells Fargo
- Elliott Management bought BioMarin and Etsy during Q4, exited Arm
- Howmet Aerospace price target raised to $68 from $63 at Deutsche Bank
- Howmet Aerospace price target raised to $65 from $61 at Baird
