Howmet Aerospace Surges 2.55% on Institutional Buying and Analyst Upgrades—What’s Fueling This Rally?

Summary
• Howmet Aerospace (HWM) surges 2.55% to $203.055, breaking above its 50-day moving average of $198.79.
• Institutional investors including Osaic and Voya boost stakes by 7.9% and 9.1%, respectively, signaling strong confidence.
• Analysts raise price targets to $227–$240, with a consensus 'Moderate Buy' rating and $218.75 average target.
• Q3 EPS beats estimates by $0.04, revenue grows 13.8% YoY to $2.09B, and FY2025 guidance of $3.66–$3.68 EPS reinforces optimism.

Howmet Aerospace’s sharp intraday rally has captured market attention, driven by a confluence of institutional buying, upgraded analyst sentiment, and robust earnings performance. With the stock trading near its 52-week high of $211.95, investors are weighing whether this momentum is sustainable or a short-term spike.

Institutional Accumulation and Analyst Optimism Ignite HWM’s Rally
Howmet Aerospace’s 2.55% surge is fueled by aggressive institutional buying and a wave of analyst upgrades. Osaic Holdings Inc. increased its stake by 7.9% in Q2, while Voya Investment Management LLC added 9.1% in Q3, reflecting deepening conviction in the stock’s long-term potential. Analysts from JPMorgan, RBC, and Industrial Alliance have raised price targets to $227–$240, citing HWM’s outperformance in Q3 earnings (EPS of $0.95 vs. $0.91 estimate) and 13.8% YoY revenue growth to $2.09B. The company’s FY2025 guidance of $3.66–$3.68 EPS further solidifies its appeal, aligning with a sector-wide shift toward high-margin aerospace and defense plays.

Aerospace & Defense Sector Gains Momentum as HWM Outpaces Peers
The Aerospace & Defense sector is experiencing renewed vigor, with HWM outperforming key peers like L3Harris Technologies (LHX) and RTX Corporation (RTX). LHX trades at $288.83 (+2.16%), while RTX is at $183.12 (+2.71%), both showing strength but lagging HWM’s 2.55% gain. HWM’s rally is underpinned by its diversified exposure to engine products and forged wheels, whereas sector leaders like LHX and RTX face near-term production bottlenecks. Analysts highlight HWM’s 18.18% net margin and 29.21% ROE as standout metrics, contrasting with RTX’s 12.4% net margin.

Options and ETFs to Capitalize on HWM’s Bullish Momentum
• 200-day MA: $173.01 (well below current price)
• 50-day MA: $198.79 (broken to the upside)
• RSI: 42.41 (neutral, not overbought)
• MACD: -1.27 (bearish but flattening)
• Bollinger Bands: Price at $203.055 (near upper band of $205.16)
• Support/Resistance: 30D support at $190.98, 200D support at $190.26

HWM’s technicals suggest a short-term bullish setup, with the 50-day MA acting as a key support level. The stock is trading near the upper Bollinger Band, indicating potential for a continuation of the rally. For options traders, two contracts stand out:

• HWM20251226C200: Call option with a $200 strike, 29.62% IV, 63.64% delta, -0.810 theta, 4.22% gamma, and $2,250 turnover. This contract offers a 39.36% leverage ratio, making it ideal for capitalizing on a 5% upside scenario (projected price: $213.21). Payoff would be $13.21 per share, or $2,642 for one contract.
• HWM20251226C202.5: Call option with a $202.5 strike, 23.43% IV, 52.89% delta, -0.681 theta, 5.66% gamma, and $780 turnover. Its 67.57% leverage ratio amplifies gains in a moderate rally. A 5% move to $213.21 would yield $10.71 per share, or $2,142 for one contract.

Aggressive bulls should consider HWM20251226C200 for a high-leverage play on a breakout above $203.745 (intraday high). Conservative traders may opt for HWM20251226C202.5 to balance risk and reward.

Backtest Howmet Aerospace Stock Performance
The backtest of HWM's performance following a 3% intraday surge from 2022 to the present shows favorable results. The 3-day win rate is 56.75%, the 10-day win rate is 61.18%, and the 30-day win rate is 71.16%, indicating a higher probability of positive returns in the short term. The maximum return during the backtest was 11.36% over 30 days, suggesting that HWM can deliver decent gains even after the initial 3% surge.

HWM’s Rally Gains Legs—Position for a Breakout or Reentry
Howmet Aerospace’s 2.55% surge is underpinned by institutional buying, upgraded analyst targets, and strong earnings, positioning it as a top-tier aerospace play. The stock’s proximity to its 52-week high and a bullish RSI reading suggest momentum could extend. Investors should monitor the $203.745 intraday high as a critical breakout level; a close above this could trigger a retest of $211.95. Meanwhile, sector leader Boeing (BA) is up 3.34%, reinforcing the sector’s strength. For immediate action, consider a long position in HWM or the HWM20251226C200 call option if the stock breaks above $203.745.