Market Momentum Shifts: Howmet Aerospace Takes Center Stage
As the Dow futures rise, investors are on the lookout for stocks that can capitalize on the surge. One such stock is Howmet Aerospace (HWM), which has been showing remarkable strength ahead of a potential breakout.
Aerospace Stocks Poised for Growth
With the new administration taking office, defense stocks are expected to benefit from a strengthened defense budget. Rising geopolitical tensions also bode well for the industry. As a Boeing supplier, Howmet Aerospace is well-positioned to capitalize on this trend.
Howmet’s Impressive Performance
Howmet stock has more than doubled in 2024, making it one of the S&P 500’s top performers. The company’s earnings outlook was lifted on November 6, sending the stock soaring 3.9% to 119.22. With a 120.71 buy point from a shallow cup base, HWM stock is already actionable from clearing last week’s high of 115.16.
Relative Strength Line Signals Bullish Trend
The relative strength line for HWM stock is making a new high ahead of a potential breakout, indicating a long-term uptrend. This strength indicator shows that Howmet has outpaced 94% of all stocks in IBD’s database over the past year.
Industry Peers Show Promise
Other aerospace and defense stocks, such as RocketLab (RKLB), FTAI Aviation (FTAI), and Embraer (ERJ), are also showing strength. RocketLab stock is nearing a test of 50-day support, while FTAI stock and Embraer stock are pulling back to their 50-day lines.
Howmet’s Fundamentals Shine
With a perfect Composite Rating of 99, Howmet Aerospace stock boasts an EPS Rating of 95 out of a best-possible 99. The company has grown earnings per share at a 47% average clip over the past three quarters, well above its three-year rate of 37%.
CEO’s Outlook for 2025
Howmet CEO John Plant expects commercial aerospace demand to remain robust, driven by air traffic growth and the need for additional engine spare parts. While the company remains cautious about new aircraft builds, Plant sees growth in the defense, aerospace, and industrial markets this year.
Analysts’ Expectations
Analysts expect a 45% earnings jump for 2024 and a 19% gain in 2025. Share buybacks, cash generation, and debt reduction have also boosted this aerospace and defense play.
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