On Monday, Argus maintained its Buy rating on Howmet Aerospace Inc. (NYSE: HWM (BMV:HWM)) and raised its shares target to $90 from $75. The firm recognized the company for enduring the worst of the supply-chain crisis and noted a brighter outlook, especially with the recovery of the commercial aerospace market. Howmet Aerospace, with a market capitalization of $27 billion, operates within the aerospace & defense and commercial transportation sectors.
The company has faced challenges due to high input and commodity prices, but its situation has improved as it overcomes supply chain issues. Argus also highlighted Howmet's strengthening balance sheet, citing the company's efforts in paying down debt. The firm anticipates that Howmet Aerospace is positioned to rapidly grow its earnings over the next three to four years.
From a technical analysis perspective, the analyst cites that the shares have shown a bullish pattern of higher highs and higher lows since September 2022. The firm believes that the premium multiples at which the shares trade are warranted, given Howmet's consistent growth and market outperformance.
Argus expects Howmet Aerospace to maintain its momentum, supporting the new price target of $90. The firm's outlook reflects confidence in the company's future performance and its ability to capitalize on the recovering aerospace market.
InvestingPro Insights
InvestingPro data highlights Howmet Aerospace Inc.'s (NYSE: HWM) robust financial position, with a market capitalization of $32.2 billion, indicating a larger size than previously noted by Argus. The company's steady revenue growth, at 15.47% over the last twelve months as of Q1 2024, supports the positive outlook on its ability to overcome recent economic challenges. A notable increase in gross profit to $1.946 billion, coupled with a gross profit margin of 28.36%, reflects the company's efficiency in managing its costs amidst the supply chain crisis. Additionally, the company has demonstrated significant shareholder returns, with a one-year price total return of 79.78%, showcasing strong market performance.
InvestingPro Tips further enrich the analysis by revealing that Howmet Aerospace has raised its dividend for three consecutive years, suggesting a commitment to returning value to shareholders. The company's stock has also seen a significant return over the last week, with a one-week price total return of 17.55%, which aligns with the bullish pattern identified by Argus. Analysts have revised their earnings upwards for the upcoming period, indicating optimism about the company's future earnings potential. For readers interested in more comprehensive analysis, there are 19 additional InvestingPro Tips available for Howmet Aerospace, which can be explored further at https://www.investing.com/pro/HWM. To delve into these insights, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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