Should You Buy Howmet Aerospace After a 33% Rally in 6 Months?

Howmet Aerospace Inc.’s HWM investors have been experiencing some short-term gains from the stock. The company’s shares have surged 33% in the past six months, outpacing the industry and the S&P 500, which have returned 8.8% and 3.3%, respectively. The company has also outshone its peers like Textron Inc. TXT and RTX Corporation RTX , which have returned 13.4% and 30.9%, respectively, over the same time frame.HWM Outperforms the Industry, S&P 500 & PeersImage Source: Zacks Investment ResearchClosing at $251.65 in the last trading session, the stock is trading close to its 52-week high of $267.31 and significantly higher than its 52-week low of $105.04. It is trading above both its 50-day and 200-day moving averages, indicating solid upward momentum and confidence in the company's long-term prospects.HWM Stock’s 50-Day & 200-Day Moving Averages Image Source: Zacks Investment ResearchLet’s take a look at HWM’s fundamentals to better analyze how to play the stock.What’s Behind HWM Stock’s Momentum?Strong momentum in Howmet Aerospace’s commercial aerospace market continues to drive its overall growth. Rising global air passenger traffic has boosted demand for wide-body aircraft, resulting in higher OEM spending and steadily increasing demand for the aircraft parts and products supplied by the company.Revenues from the commercial aerospace market increased 13% year over year in the fourth quarter of 2025, which constituted 53% of its business.  Also, in the first, second and third quarters, revenues from the market increased 9%, 8% and 15% year over year, respectively. The sustained strength was attributed to new, more fuel-efficient aircraft with reduced carbon emissions and increased spare demand for engines. The Boeing Company BA is also anticipated to witness a gradual production recovery, particularly in the Boeing 737 MAX aircraft, which is expected to boost demand for HWM’s products in the market.The defense side of the aerospace market has also been witnessing positive momentum driven by steady government support. The company has been witnessing robust orders for engine spares for the F-35 program and spares for legacy fighters like the F-15 and the F-16. In the fourth quarter, revenues from the defense aerospace market surged 20% year over year, constituting 17% of the company’s revenues. Also, in the first, second and third quarters, revenues from this market increased 19%, 21% and 24% year over year, respectively. The company’s measures to reward shareholders are encouraging. In 2025, HWM paid dividends of $181 million and repurchased shares worth $700 million. In August 2025, the company hiked its dividend by 20% to 12 cents per share (annually: 48 cents), marking its second dividend hike in 2025. Also, in July 2024, its board approved an increase in the share repurchase program by $2 billion to $2.487 billion of its common stock. As of Feb. 6, 2025, HWM’s total share repurchase authorization available was $1.35 billion.Howmet Aerospace operates in the aerospace and defense markets, which include major industry players like Textron and RTX Corp.HWM’s Estimate RevisionsImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for HWM’s bottom line for 2026 has increased 3.2% in the past 60 days.ValuationImage Source: Zacks Investment ResearchHowmet Aerospace is trading at a forward 12-month price-to-earnings (P/E) ratio of 53.20X, much higher than the industry average of 33.05X. This elevated valuation could make the stock vulnerable to further pullbacks if market sentiment sours.In comparison with HWM’s valuation, its peers, Textron and RTX Corp., are trading cheaper. TXT and RTX are currently trading at 29.85X and 12.58X, respectively.ConclusionStrength across both the commercial and defense aerospace markets, driven by solid aircraft build rates, strong engine spare demand and elevated defense spending, positions Howmet Aerospace well for sustained growth in the coming quarters. Supported by a healthy liquidity position, the company’s shareholder-friendly initiatives further enhance its investment appeal. Despite trading at a premium valuation, favorable analyst sentiment and strong growth prospects suggest that investors may consider this Zacks Rank #2 (Buy) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>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 The Boeing Company (BA): Free Stock Analysis Report Textron Inc. (TXT): Free Stock Analysis Report Howmet Aerospace Inc. (HWM): Free Stock Analysis Report RTX Corporation (RTX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks