Howmet's Defense Aerospace Strength Seems Firm: More Upside Ahead?

Howmet Aerospace Inc. HWM is poised to gain from the expanding defense budget, which remains a key growth catalyst. In the fourth quarter of 2025, revenues from the defense aerospace market rose 20% year over year, which accounted for 17% of HWM’s total sales. Also, in the first, second and third quarters, revenues from this market increased 19%, 21% and 24% year over year, respectively.

This growth in revenues was driven by strong demand for engine spares, especially for the F-35 program, as well as new builds and spare parts for legacy fighter jets. As a result, Howmet’s Engineered Structures segment reported impressive results in the fourth quarter. The segment’s revenues rose 4% year over year. With military aircraft programs expected to benefit from increased funding, HWM is poised to continue benefiting from consistent demand in the quarters ahead.

In July 2025, the House of Representatives passed the fiscal year 2026 Defense Appropriations Act, providing a total discretionary allocation of $831.5 billion. This rise in military funding bodes well for Howmet’s defense aerospace market.

The recent increase in military funding positions Howmet well to win more contracts. With strong momentum in the F-35 program and steady government support, its defense aerospace market is expected to flourish in the quarters ahead.

HWM’s Peers in the Defense Space

Among its major peers, Textron Inc.’s TXT defense business is gaining momentum, backed by key U.S. military contracts and steady government support. In the first quarter of 2025, Textron’s Systems segment secured a U.S. Navy contract worth up to $100 million and delivered 13 Ship-to-Shore Connector jets. Meanwhile, Textron’s Bell segment is progressing in the FLRAA program, backed by facility expansions to support future production.

Its another peer, GE Aerospace’s GE Defense & Propulsion Technologies business is benefiting from the rising demand for its advanced propulsion systems and military engine programs. During 2025, Ge Aerospace secured a $5 billion contract from the U.S. Air Force to supply F110 engines, parts and support services as part of a Foreign Military Sales (FMS) program. Also, GE Aerospace secured a U.S. Army IDIQ contract to supply F110 engines in the same period.

HWM's Price Performance, Valuation and Estimates

Shares of Howmet have surged 21.6% in the past three months compared with the industry’s growth of 4%.

Image Source: Zacks Investment Research

From a valuation standpoint, HWM is trading at a forward price-to-earnings ratio of 50.75X, above the industry’s average of 31.88X. Howmet carries a Value Score of F.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for HWM’s earnings has been on the rise over the past 60 days.

Image Source: Zacks Investment Research

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

5 Stocks Set to Double

Each was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They include

Stock #1: A Disruptive Force with Notable Growth and Resilience

Stock #2: Bullish Signs Signaling to Buy the Dip

Stock #3: One of the Most Compelling Investments in the Market

Stock #4: Leader In a Red-Hot Industry Poised for Growth

Stock #5: Modern Omni-Channel Platform Coiled to Spring

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.

See Our Newest 5 Stocks Set to Double Picks >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

GE Aerospace (GE): Free Stock Analysis Report

Textron Inc. (TXT): Free Stock Analysis Report

Howmet Aerospace Inc. (HWM): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research