UBS has raised its price target for Howmet Aerospace Inc. to $260 from $228, while keeping a Neutral recommendation on the shares. The stock is trading at $253.74, roughly 1% shy of its 52-week high of $256.70, after returning about 88% over the last 12 months.
The broker pointed to record EBITDA margins and incremental margin improvement supported by pricing, higher content per aircraft and volume growth, even as the company contends with rising headcount and increasing execution complexity. Data from InvestingPro cited by UBS shows Howmet’s last-twelve-month EBITDA at $2.39 billion and a gross profit margin of 34.17%.
UBS expects aerospace demand to pick up markedly in 2026 as the MAX platform recovers and widebody production increases. In addition, the firm highlighted continued strength in spares across Howmet’s portfolio and growing contribution from gas turbine power markets. Howmet recorded revenue growth of 11.06% recently and UBS projects comparable momentum to persist into fiscal 2026.
The analyst house said it sees ongoing top-line momentum and progressively higher margins driven by the same factors. UBS conceded it had under-estimated the valuation multiple investors are willing to ascribe to Howmet and now anticipates upside to consensus earnings projections.
InvestingPro’s analysis, referenced by UBS, assigns Howmet a financial health score of 3.32, described as "GREAT," noting that liquid assets exceed short-term obligations and the company carries a current ratio of 2.13.
On valuation, UBS’s figures indicate Howmet trades at 36 times the firm’s 2026 estimated EBITDA, the highest multiple across the broker’s coverage. UBS calculates that to match the trading relationship of GE Aerospace, Howmet would require an EBITDA margin of 40% - a level substantially above consensus expectations. The stock’s present P/E ratio stands at 68.55 and its EV/EBITDA multiple is 43.56, figures that imply a significant premium. InvestingPro’s Fair Value assessment concludes Howmet appears overvalued at current prices.
Corporate actions and other analyst moves accompany UBS’s update. Howmet declared a quarterly dividend of $0.12 per common share, payable on February 25, 2026. Separately, the company has signed a definitive agreement to acquire Consolidated Aerospace Manufacturing from Stanley Black & Decker for approximately $1.8 billion in cash. The deal is expected to close in the first half of 2026, subject to regulatory approvals.
Management forecasts Consolidated Aerospace Manufacturing will generate revenue between $485 million and $495 million in fiscal 2026 and that the business will deliver an adjusted EBITDA margin in excess of 20% before synergies are realized.
In related analyst activity, Bernstein increased its price target on Howmet to $241 while maintaining an Outperform rating, pointing to healthy expansion in the Engine Products segment. Stanley Black & Decker intends to apply the proceeds from the sale to reduce its debt load and work toward a leverage target of 2.5 times net debt to adjusted EBITDA.
The UBS note underscores a contrast between improving operational performance and elevated market valuation. While revenue and margin trajectories are cited as supportive of further upside, valuation metrics currently place Howmet at a premium versus peers and consensus, according to the data points included in the research.
Summary
UBS raised Howmet Aerospace’s price target to $260 but kept a Neutral rating, citing record margins, durable revenue growth and expanding contributions from aerospace spares and gas turbine power. The company announced a modest quarterly dividend and a near-term acquisition that adds roughly half a billion dollars in expected annual revenue and double-digit adjusted EBITDA margins prior to synergies. Despite strong fundamentals, multiple valuation measures indicate Howmet trades at a premium to peers and InvestingPro’s fair-value metric flags overvaluation at current levels.
Key points
- UBS lifted its price target to $260 from $228 and retained a Neutral rating; shares trade near a 52-week high after an 88% one-year return.
- Howmet reported LTM EBITDA of $2.39 billion and a gross profit margin of 34.17%; revenue grew 11.06% and is expected to maintain momentum into fiscal 2026.
- Company actions include a $0.12 quarterly dividend payable February 25, 2026, and an agreed acquisition of Consolidated Aerospace Manufacturing for about $1.8 billion, expected to close in H1 2026.
Risks and uncertainties
- Valuation risk: Current multiples (P/E 68.55; EV/EBITDA 43.56) imply a substantial premium; InvestingPro’s Fair Value view regards the shares as overvalued.
- Execution and complexity: UBS notes rising headcount and greater execution complexity that could pressure margins or integration efforts, relevant to the aerospace manufacturing sector.
- Deal close and regulatory risk: The Consolidated Aerospace Manufacturing acquisition is subject to regulatory approvals and is expected to close in the first half of 2026, creating timing and execution uncertainty for the industrials and aerospace supply chain sectors.
Conclusion
UBS’s updated view balances stronger-than-expected operational performance and a solid financial position against rich valuation metrics. The planned acquisition and ongoing revenue strength are likely to influence Howmet’s trajectory into fiscal 2026, but investors and market participants will weigh these developments against premium multiples and integration risk.