On Friday, Truist Securities increased the price target for Howmet Aerospace Inc. (NYSE:HWM (BMV:HWM)) shares to $123 from the previous target of $105, while maintaining a Buy rating on the stock. The adjustment follows the company's third-quarter 2024 guidance, which anticipates revenues to hit the midpoint of $1.855 billion, EBITDA at the midpoint of $465 million, and adjusted earnings per share (EPS) of $0.64.
The analyst from Truist Securities projects solid results for the quarter, with the aerospace aftermarket expected to balance out any weakness in the aerospace original equipment manufacturer (OEM) sector. Additionally, the analyst anticipates that management will reaffirm its outlook for the full year of 2024.
A key point of interest for investors will be the initial commentary on revenue growth rates for 2025, which is likely to influence the stock's performance. If management provides initial revenue growth guidance for 2025, expectations are set for commercial aerospace to grow in the low teens range, defense to increase in the mid-single-digit (MSD) range, and transportation to rise in the low-single-digit (LSD) range.
Furthermore, management's insights on various operational aspects are poised to draw attention. These include aircraft production rates, aftermarket demand, supply chain conditions, labor dynamics, and pricing strategies. These factors are considered crucial for understanding Howmet Aerospace's performance and strategic direction in the near future.
In other recent news, Howmet Aerospace has been the center of several significant developments. The company reported a 14% year-over-year increase in revenue and a 27% rise in commercial aerospace revenue. Concurrently, Howmet Aerospace successfully closed a $500 million offering of 4.850% Notes due 2031, aiming to refinance existing debt and reduce annual interest expenses.
Susquehanna initiated coverage on Howmet Aerospace with a positive rating, setting a price target of $120.00, highlighting the company's advantageous position within the Commercial Aerospace & Defense sectors. Similarly, Deutsche Bank raised its price target for Howmet Aerospace shares to $125 from $106, maintaining a Buy rating on the stock.
Additionally, Howmet Aerospace announced a proposed offering of notes, intending to redeem approximately $577 million of its outstanding 6.875% notes due in 2025. The company also plans to increase capital expenditures by $30 million in 2024 and raise its common stock dividend to $0.08 per share.
InvestingPro Insights
Howmet Aerospace Inc. (NYSE:HWM) has been demonstrating strong financial performance, aligning with Truist Securities' optimistic outlook. According to InvestingPro data, the company's revenue growth stands at 14.46% for the last twelve months as of Q2 2024, with a robust EBITDA growth of 23.98% over the same period. These figures support the analyst's expectations of solid results for the upcoming quarter.
InvestingPro Tips highlight that Howmet Aerospace has raised its dividend for 4 consecutive years, indicating a commitment to shareholder returns. This could be particularly attractive to investors looking for companies with consistent dividend growth. Additionally, the company is trading at a low P/E ratio relative to near-term earnings growth, with a PEG ratio of 0.59, suggesting potential undervaluation despite the recent price target increase.
It's worth noting that Howmet Aerospace's stock has shown exceptional performance, with a one-year price total return of 140.29% and a year-to-date return of 96.71%. This strong momentum aligns with the analyst's bullish stance and the increased price target.
For investors seeking more comprehensive analysis, InvestingPro offers 17 additional tips for Howmet Aerospace, providing deeper insights into the company's financial health and market position.
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