Q2 Earnings Preview: Howmet Faces Commercial Transportation Softness, Robust Aerospace Demand Ahead?

Howmet Aerospace's commercial transportation market revenues declined 4% YoY in Q2 due to softer OEM builds and lower truck builds. The company expects weakness to persist through H2, while aerospace markets remain strong. Kennametal is also experiencing softness in the Metal Cutting segment due to decreased demand in the transportation end market. GE Aerospace is witnessing strong demand for its engines and services. Howmet shares have surged 34% in the past six months and trade at a forward P/E ratio of 43.51X.

The market activity on July 2, 2025, showcased varied performance across key sectors, with notable movements in Howmet Aerospace (HWM), Kennametal, and GE Aerospace (GE). Howmet Aerospace, a leading provider of aerospace components, experienced a significant 34% surge in its stock price over the past six months, trading at a forward P/E ratio of 43.51X [1]. The company's commercial transportation market revenues declined 4% YoY in Q2 due to softer OEM builds and lower truck builds. Howmet expects this weakness to persist through H2, while aerospace markets remain strong [1]. Kennametal, on the other hand, is experiencing softness in its Metal Cutting segment due to decreased demand in the transportation end market [1]. GE Aerospace, however, is witnessing robust demand for its engines and services, with the company forecasting strong growth trends [2].

MarketAxess (MKTX) and Constellation Energy (CEG) emerged as notable gainers on July 2, 2025, with MKTX up 4.12% to $192.85 and CEG up 5.89% to $316.05. Other significant gainers included Howmet Aerospace (HWM), Corning (GLW), and Netflix (NFLX), with HWM up 2.92% to $173.92, GLW up 1.10% to $66.87, and NFLX up 19.07% to $1223.72 [1]. Constellation Energy's stock performance was bolstered by the Federal Energy Regulatory Commission's (FERC) approval of its $1.6 billion acquisition of Calpine Corporation, which is expected to strengthen its renewable energy portfolio [1]. Analysts have shown optimism toward CEG, upgrading the stock to "Overweight" and raising price targets to $375 [1]. Netflix's stock surged due to the success of its animated film "KPop Demon Hunters," which marked Netflix's first theatrical No. 1, bridging streaming and cinema audiences [1].

GE Aerospace shares caught a morning bid and held those gains through the close of trading, driven by news that Korean Air inked a $50 billion order on Monday, Aug. 25, for 103 Boeing airplanes and GE Aerospace engines [2]. The company's stock has seen a 67% increase since April, with analysts upgrading the stock to a hold rating due to fair valuation and mixed technical indicators [2]. Despite strong earnings and guidance, GE's stock is seen as near fair value, with the technicals pointing to modest exhaustion in what has been a tremendous rally since mid-April [2].

In conclusion, the market activity on July 2, 2025, highlighted the strategic momentum and investor confidence in companies like MarketAxess, Constellation Energy, and Netflix. These gains underscore the importance of strategic expansions, regulatory approvals, and innovative technological advancements in driving stock performance. Howmet Aerospace's strong performance despite market challenges, Kennametal's softness in the Metal Cutting segment, and GE Aerospace's robust demand for engines and services reflect the dynamic nature of the market.

References:
[1] https://www.ainvest.com/news/liquid-option-names-rise-marketaxess-constellation-energy-howmet-aerospace-corning-netflix-2508/
[2] https://seekingalpha.com/article/4817425-ge-aerospace-stunning-rally-is-likely-to-pause-rating-downgrade