Howmet Aerospace emerged from its technology and markets presentation with renewed endorsement from several research houses, which highlighted demand tailwinds across commercial aerospace, power generation and defense that could support revenue and margin gains.
RBC Capital Markets reiterated an Outperform rating and increased its price target to $300 from $275, saying Howmet is well positioned in both aircraft engine components and gas turbine parts. The brokerage underscored management's view of robust end-market dynamics, including an expected roughly 9% rise in commercial aircraft deliveries through 2030. Management also projects that revenue tied to industrial gas turbines will more than double over the next three to five years from about $1 billion in 2025.
Analysts noted that defense aerospace demand remains a meaningful contributor to Howmet's business. The Lockheed Martin F-35 Lightning II program accounts for about 45% of Howmet's defense aerospace revenue, and Howmet expects spare parts sales to overtake original equipment sales this year.
RBC pointed to several levers the company believes will allow it to outpace its end markets: share gains, disciplined pricing, capacity expansion and manufacturing improvements. The brokerage also flagged Howmet's Whitehall casting facility and a vertically integrated production process as tangible competitive strengths that support scale and control of value chains.
Jefferies said the investor day reinforced its constructive view, describing demand conditions across commercial aerospace, gas turbines and defense as a "perfect storm." The firm expects growth in aircraft engine components to be supported by rising new aircraft production and increased orders for spare parts from airlines. Jefferies additionally suggested that gas turbine demand could strengthen alongside rising electricity consumption from data centers.
Jefferies highlighted automation, digital manufacturing tools and materials science capabilities as factors that could lift production yields and margins across Howmet's portfolio.
Morgan Stanley maintained an Overweight rating, citing high barriers to entry within the aircraft engine supply chain and Howmet's potential to boost productivity via automation and data-driven manufacturing methods.
While Howmet did not publish new financial targets during the event, analysts said management reiterated a strategy focused on investing in technology and capacity to capture growth opportunities across aerospace and power markets.
Context for markets
- Commercial aerospace: Analysts see roughly 9% growth in deliveries through 2030, supporting demand for engine components and spares.
- Power generation: Management expects industrial gas turbine revenue to more than double from about $1 billion in 2025 over the next three to five years.
- Defense: The F-35 program represents roughly 45% of Howmet's defense aerospace revenue, with spare parts sales expected to exceed original equipment sales this year.