PITTSBURGH – Howmet Aerospace Inc. (NYSE:HWM (BMV:HWM)), a manufacturer specializing in nonferrous metal production, announced today the full redemption of its outstanding 5.125% Notes due in October 2024. The company reported that the remaining principal amount of $205,273,000 was redeemed at par value along with accrued interest, totaling an approximate payout of $208 million.
This financial maneuver was executed utilizing the company's available cash reserves. The accrued interest paid in conjunction with the redemption amounted to roughly $3 million.
Howmet Aerospace, previously known under names such as Arconic Inc. and ALCOA INC, is headquartered in Pittsburgh, Pennsylvania, and operates within the manufacturing sector under the SIC code 3350. The company, incorporated in Delaware and with a fiscal year-end on December 31, has a history that includes several name changes, the most recent being from Arconic Inc. in 2016.
The decision to redeem these notes ahead of their maturity date reflects the company's financial strategy and capital allocation decisions. The redemption was carried out on Monday, July 1, 2024, as per the details outlined in the company's filing with the U.S. Securities and Exchange Commission (SEC).
In other recent news, Howmet Aerospace has been the focus of several financial firms adjusting their outlooks on the company's shares. BTIG initiated coverage of Howmet Aerospace, establishing a Buy rating and a price target of $95. The firm recognizes Howmet's potential to benefit significantly from the ongoing recovery in commercial aerospace and an increase in defense spending.
In a robust first quarter of 2024, the company exceeded sales and margin expectations, leading KeyBanc Capital Markets to raise their price target from $70 to $90 while maintaining an Overweight rating. They also increased their earnings estimates for the second quarter of 2024 to $0.61 per share, up from $0.58, and for the full years 2024 and 2025 to $2.40 and $3.00 per share respectively.
Argus maintained its Buy rating on Howmet Aerospace and increased its share target to $90 from $75, citing the company's resilience amidst the supply-chain crisis and its potential for rapid earnings growth in the next few years. Meanwhile, Baird raised its price target from $74 to $84, pointing to robust growth prospects in the aerospace sector. Finally, following a strong first-quarter earnings report, RBC Capital Markets raised the price target to $90.00, up from the previous $75.00. These recent developments underscore the positive outlook for Howmet Aerospace in the investment community.
InvestingPro Insights
In light of Howmet Aerospace Inc.'s recent financial activities, including the redemption of its 5.125% Notes, a closer look at the company's performance metrics offers additional insights. According to real-time data from InvestingPro, Howmet Aerospace boasts a solid market capitalization of $31.54 billion, underlining its significant presence in the nonferrous metal production industry. The company's P/E ratio stands at 36.87, suggesting investors are willing to pay a premium for its earnings. This valuation is supported by a healthy revenue growth of 15.47% over the last twelve months as of Q1 2024.
InvestingPro Tips indicate that Howmet has raised its dividend for three consecutive years and is trading at a low P/E ratio relative to near-term earnings growth, which could be attractive to value-oriented investors. Additionally, the company has been profitable over the last twelve months and analysts predict it will remain profitable this year. With a strong return over the past year, reflected in a 57.16% one-year price total return, Howmet Aerospace demonstrates robust performance in the market.
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