선택적 제품 분석
허용하는 경우 개인정보 보호를 고려한 제한적 분석을 사용해 어떤 리서치 여정이 효과적인지 파악합니다. 광고 추적기나 세션 녹화는 사용하지 않습니다. 환경설정에서 이 선택을 변경할 수 있습니다. 자세한 내용은 개인정보 처리방침.
The primary evidence-backed opportunity centers on accelerated commercial widebody assembly rates, coupled with high-margin spare blade retrofit cycles across the LEAP-1B and Pratt & Whitney GTF fleets.
Commercial airframe OEM delivery pauses and build-rate deceleration falling below an 8.0% annual growth threshold over a 24-month horizon.
Howmet Aerospace Inc. (HWM) is an operationally elite precision manufacturer with dominant market positions in rotating jet engine castings and aerospace fasteners, generating $8,252M in FY2025 revenue and expanding operating margins to 24.79%.47
Howmet Aerospace benefits from an entrenched Narrow economic moat anchored by high structural switching costs, intellectual property in single-crystal superalloy casting, and specialized manufacturing scale. The company's primary profit engine, Engine Products, delivered $4,327M in FY2025 (52.44% of total sales), serving as a sole-source provider of flight-critical rotating turbine aerofoils across high-volume platforms including the CFM LEAP and Pratt & Whitney GTF. Consolidated rose to $2,046M in FY2025, yielding a 21.53% that comfortably surpasses the company's 9.41% cost of capital.
Operational capacity is tightly committed across the medium term. Management confirmed that casting pit capacity is essentially fully booked through 2028-2030, with only a single casting pit remaining uncommitted. To support long-term demand across commercial aerospace and terrestrial industrial gas turbines, capital expenditures are guided to exceed $500M in FY2026, up from $453M in FY2025. Furthermore, procurement lead times of up to three years on specialized coating machinery prevent near-term physical capacity expansion beyond contracted schedules. Consequently, revenue ramps are bounded near consensus expectations of $10,105.77M in FY2026 and $11,487.74M in FY2027.157
Reverse DCF analysis demonstrates that the prevailing market price of $232.48 implies an aggressive 21.75% compound annual earnings growth rate over the next decade. Relative to defense and aerospace peers trading at normalized multiples—such as General Dynamics at 18.12x and Northrop Grumman at 16.77x forward earnings —Howmet's 35.97x forward P/E reflects an unsustainable valuation multiple. In present-value terms, our fair value sits 71.7% below the analyst consensus 12-month target equivalent of $308.01 (discounted from $337.74 at 9.6529% Ke).34
With shares facing -62.4% downside toward fundamental value, we recommend a Sell rating. Investors should systematically trim holdings to lock in capital gains, remaining vigilant regarding commercial aircraft OEM delivery cadence and margin dilution from acquired businesses such as CAM.5
Engine Products generated $4,327M in FY2025 (52.44% of consolidated sales), holding sole-source flight-critical positions on CFM LEAP and Pratt & Whitney GTF platforms that ensure long-run pricing power.8
Howmet's casting pits are essentially fully booked through 2028-2030, providing reliable top-line visibility supporting consensus revenue of $10,105.77M in FY2026 and $11,487.74M in FY2027.15
Operating margin expanded to 24.79% in FY2025 ($2,046M operating income), driving a 21.53% return on invested capital that comfortably exceeds the 9.41% WACC benchmark.27
Sell. Howmet Aerospace's premium operational execution and structural moat are fully eclipsed by an unsustainable market valuation at 35.97x forward earnings. With intrinsic fair value estimated at $87.31 per share, shares carry -62.4% downside from the share price of $232.48 as of September 25, 2026.4
Forged Wheels provides forged aluminum wheels and related products for heavy-duty trucks and the commercial transportation market. Commercial Transportation Market.
The commercial transportation market represented approximately 15% of the Company’s revenue in 2025. The Company invented the forged aluminum truck wheel in 1948, and continues to advance technology to deliver breakthrough solutions that make trucks and buses lighter, more fuel efficient and sharper-looking.
Stress testing evaluates the compounding impact of an airframe OEM delivery slowdown, 300 bps operating margin compression from acquisition integration friction and superalloy inflation, and valuation multiple de-rating toward peer medians. In this scenario, commercial aircraft OEM bottlenecks interrupt engine delivery schedules, reducing fixed-cost absorption in Engine Products. Concurrently, elevated capital expenditures exceeding $500M in FY2026 and subsequent increases in FY2027 consume operating cash before incremental casting capacity delivers commercial volume in 2028-2030. Under these stress conditions, valuation contracts toward the lower bound of our fair value range at $72.02, highlighting substantial capital loss exposure from the current analysis price of $232.48.
The Bear scenario models qualitative operational and valuation headwinds, including commercial airframe assembly delays at Boeing and Airbus, persistent margin dilution from CAM integration, and equipment delivery slippage on 3-year lead-time machinery. These factors drive operating margin contraction and multiple de-rating toward defense prime peer levels.
Howmet volume ramps depend directly on commercial aircraft OEM assembly schedules. Executive leadership noted risks of demand destruction if industry build rates peak prematurely. Current consensus models 22.46% revenue growth in FY2026 and 13.68% in FY2027; a 500 bps multi-year growth reduction below base expectations triggers severe earnings compression with an estimated fair value impact of -24.5%.5
투자 논리를 약화시킬 수 있는 다섯 가지 변화입니다.
Deceleration below 8.0% signals commercial airframe OEM assembly pauses or engine delivery schedule pushouts, materially compressing segment overhead absorption and consolidated operating income.
현재:21.0% organic growth in Q2 2026
다음이면 경고< 8.0% TTM revenue growth
Howmet Aerospace's competitive moat is anchored in its structural dominance across critical rotating aerofoils and aerospace fastening systems. In Engine Products, which delivered $4,327M in FY2025 (52.44% of consolidated revenue), the company operates as a sole-source or primary supplier for single-crystal superalloy turbine blades and structural engine castings across major narrowbody and widebody programs. The technical complexity of manufacturing cored blades capable of surviving extreme turbine temperatures creates an imposing technological moat. Aircraft engine OEMs face massive financial, regulatory, and flight-safety hurdles should they attempt to requalify alternate casting suppliers, resulting in near-total customer lock-in throughout the multi-decade lifecycles of engine programs.
The durability of this economic moat is further protected by specialized capital barriers and equipment procurement constraints. Executive leadership has highlighted that advanced coating equipment and exotic deposition machinery carry lead times of up to three years. Furthermore, casting pit capacity across the industry is essentially fully booked, with Howmet retaining committed volume extending through 2028-2030. These lead-time and physical infrastructure barriers prevent prospective entrants from capturing market share during demand surges, preserving Howmet's pricing power and high operating margins.
In Fastening Systems, which contributed $1,746M in FY2025 revenue, Howmet maintains proprietary tooling and qualified vendor listings across commercial and defense airframes. While recent acquisitions like CAM initially dilute margins due to CAM's historical 20% margin profile, legacy price execution has preserved segment profitability near 30%. Although large diversified aerospace peers possess substantial balance sheets, Howmet's focused manufacturing specialization in high-entry-barrier component niches sustains superior economic returns, validated by an ROIC of 21.53% against a WACC of 9.4143%.
Howmet generates structural economic profits supported by an ROIC of 21.53% against a deterministic WACC of 9.4143%, yielding an economic spread of +1,212 basis points. In FY2025, operating income expanded to $2,046M on revenue of $8,252M (24.79% operating margin),, generating $1,431M in free cash flow on net income of $1,508M. While economic profit generation is exceptionally robust, the market price of $232.48 capitalizes these excess returns at a forward multiple (35.97x) far above intrinsic enterprise value.
Each lens answers a different valuation question. Only included lenses set Fair value; floors and diagnostics provide context.
Apply a terminal P/E to the dated forward path, then discount that future share value back to the analysis date.
None of the valuation methods used to calculate Fair value relies on a separate assumption about how long the competitive advantage lasts.
The highlighted cell is Fair value when every assumption sits at its base level ($87.31). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $1.6B after modeled reinvestment of $401.0M, with terminal value at 76.8% of enterprise value. A sudden drop in free cash flow is not projected unless capital spending relative to revenue, reinvestment, or gross margin resets materially.
The Base scenario reflects our house forecast schedule, where revenue expands to $10,056M in FY2026 and $11,439M in FY2027, consistent with management full-year guidance. Operating margins expand from 24.79% in FY2025 to 25.90% by FY2030 as casting pit utilization remains fully committed. Supported by a 90% free cash flow conversion rate, enterprise DCF ($82.07) and owner earnings ($81.31) establish a synthesized fair value midpoint of $87.31.57
Even on an earnings beat exceeding Q3 guidance ranges ($2.58B revenue and $1.35 EPS),, Howmet's share price of $232.48 as of September 25, 2026 trades at 35.97x forward earnings, representing a 166.3% premium to our fair value midpoint of $87.31. High multiples leave the stock acutely vulnerable to multiple contraction regardless of near-term execution.
Results delivered within management's Q3 guidance window ($2.57B-$2.59B revenue and $1.34-$1.36 EPS), confirm solid operational throughput but reinforce that aggressive growth assumptions are fully priced in. With far outstripping peer averages (GD at 18.12x, NOC at 16.77x), inline performance provides no catalyst to offset valuation overextension.
A quarterly revenue or EPS shortfall below guidance floors indicates commercial airframe assembly disruptions or deeper margin dilution from CAM integration. Given the elevated 35.97x forward multiple, any operational stumble risks rapid multiple de-rating toward peer benchmarks, accelerating share price convergence toward our $87.31 midpoint.
Howmet's earnings quality is exceptionally robust, substantiated by clean cash conversion and minimal accrual distortion. Management maintains a target free cash flow conversion of 90% of net income, which was fully met in FY2025 as the company generated $1,431M in free cash flow on GAAP net income of $1,508M and operating cash flow of $1,884M. Capital expenditures of $453M comfortably exceeded annual depreciation, demonstrating that earnings are backed by tangible cash flows and prudent reinvestment. Contractual structures with commercial aero OEMs enforce strict milestone billing and low bad-debt incidence, providing verified high accounting quality across operating earnings.
Engine Products represents 52.44% of total revenue ($4,327M in FY2025) and generates the company's highest operating margins (~30%); monitoring volume throughput confirms absorption of airframe OEM build rates.
Howmet's cash flow characteristics reflect premier industrial compounder quality. Operating cash flow reached $1,884M in FY2025, supporting capital expenditures of $453M and delivering free cash flow of $1,431M. This performance aligns with management's target conversion rate of 90% of GAAP net income ($1,508M in FY2025),. Maintenance capex is estimated at approximately 70% of total capex ($317.1M), indicating that over $135M annually is dedicated to pure growth capacity expansion. While working capital requirements increase during the ongoing 22.46% revenue ramp, operating cash conversion remains high across the planning horizon.
Howmet's ROIC has expanded steadily post-split, driven by operating margin expansion to 24.79% in FY2025 and high asset turnover across high-value engine casting pits. The company's focus on proprietary rotating components and high-margin aftermarket spares generates superior capital productivity relative to diversified defense primes. Although elevated growth capex of >$500M in FY2026 temporarily expands the invested capital denominator, the commissioning of fully booked casting capacity between 2028 and 2030 will sustain ROIC above 21%, preserving an attractive economic profit spread.
Howmet delivers an ROIC of 21.53% against a cost of capital (WACC) of 9.4143%, generating a substantial positive economic spread of +1,212 basis points.
| 매출 | US$2,547,000,000 |
|---|---|
| 매출원가 | US$1,596,000,000 |
| 매출총이익 | US$951,000,000 |
| 영업비용 | US$240,000,000 |
| 영업이익 | US$711,000,000 |
| 영업외 항목 및 세금 | -US$177,000,000 |
| 순이익 | US$534,000,000 |
| 총자산 | US$11,179,000,000 |
|---|---|
| 현금 | US$742,000,000 |
| 유동자산 | US$3,779,000,000 |
| 총부채 | US$5,826,000,000 |
| 유동부채 | US$1,771,000,000 |
| 주주자본 | US$5,353,000,000 |
| 순이익 | US$1,508,000,000 |
|---|---|
| 영업 현금 유입 | US$1,884,000,000 |
| 감가상각비 | US$283,000,000 |
| 주식 기반 보상 | US$73,000,000 |
| 기타 영업 조정 | US$20,000,000 |
| 영업 현금흐름 | US$1,884,000,000 |
| 사용 가능 현금 | US$2,450,000,000 |
| 기초 현금 | US$565,000,000 |
| 환율 효과 | US$1,000,000 |
| 투자 현금 유출 | US$438,000,000 |
| 재무 현금 유출 | US$1,269,000,000 |
| 자사주 매입 | US$700,000,000 |
| 지급 배당금 | US$181,000,000 |
| 순부채 상환 | US$265,000,000 |
| 기타 재무 활동 | US$123,000,000 |
| 기말 현금 | US$743,000,000 |
| 투자 현금흐름 | -US$438,000,000 |
| 재무 현금흐름 | -US$1,269,000,000 |
출처: SEC EDGAR · 제출일 2026-02-12 · SEC EDGAR
| 영업 부문별 매출 | 매출 | 비중 | 전년 대비 |
|---|---|---|---|
| Engine Products | US$43.3억 | 52.4% | 15.6% |
| Fastening Systems | US$17.5억 | 21.2% | 10.7% |
| Engineered Structures | US$11.6억 | 14% | 7.6% |
| Forged Wheels | US$10.4억 | 12.6% | -1.4% |
출처: SEC EDGAR · 제출일 2026-02-12 · SEC EDGAR
| 지역별 매출 | 매출 | 비중 | 전년 대비 |
|---|---|---|---|
| United States | US$43.8억 | 53% | 17.9% |
| Other Geographical Regions | US$10.3억 | 12.4% | 9% |
| France | US$6.3억 | 7.6% | -7.8% |
| Japan | US$5.1억 | 6.2% | 44.5% |
| Germany | US$4.4억 | 5.3% | -4.1% |
| United Kingdom | US$3.8억 | 4.6% | 7.4% |
| Italy | US$2.6억 | 3.2% | -8% |
| Canada | US$1.9억 | 2.3% | 7.5% |
| Mexico | US$1.7억 | 2% | -24.5% |
| Poland | US$1.5억 | 1.8% | -1.3% |
| China | US$1.3억 | 1.6% | 26.2% |
2026-09-28 분석에 사용된 시점 재무 데이터입니다.
| 기간 | 매출 | EBITDA | 순이익 | 영업 현금흐름 | 잉여 현금흐름 | 자본적 지출 | 감가상각비 | 주식 기반 보상 | 자사주 매입 | 지급 배당금 | 순부채 발행 | 투자 현금흐름 | 재무 현금흐름 | 기초 현금 | 기말 현금 | 현금 및 투자자산 | 총부채 | 영업이익률 | ROIC | WACC | ROIC−WACC 스프레드 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016-12-31 | US$123.9억 | US$14.6억 | -US$9.4억 | US$9500만 | -US$10.3억 | US$11.3억 | US$11.3억 | US$7600만 | — | US$2.3억 | — | US$5.9억 | -US$7.6억 | — | US$18.8억 | US$28.8억 | US$80.5억 | 7.7% | — | 5.5% | — |
| 2017-12-31 | US$129.6억 | US$15.2억 | -US$7400만 | -US$3900만 | -US$6.4억 | US$6억 | US$5.5억 | US$5400만 | US$0 | US$1.6억 | — | US$13.2억 | -US$10.2억 | US$18.8억 | US$21.5억 | US$21.5억 | US$68.1억 | 3.7% | — | 6.0% | — |
| 2018-12-31 | US$67.8억 | US$18.2억 | US$6.4억 | US$2.2억 | -US$5.5억 | US$7.7억 | US$5.8억 | US$4000만 | US$0 | US$1.2억 | — | US$5.7억 | -US$6.5억 | US$21.5억 | US$22.8억 | US$22.8억 | US$63억 | 11.4% | — | 6.9% | — |
| 2019-12-31 | US$71억 | US$8.4억 | US$4.7억 | US$4.6억 | -US$1.8억 | US$6.4억 | US$5.4억 | US$1200만 | US$11.5억 | US$5700만 | — | US$5.3억 | -US$15.7억 | US$22.8억 | US$17억 | US$15.8억 | US$59.4억 | 8.2% | — | 6.9% | — |
| 2020-12-31 | US$52.6억 | US$8.3억 | US$2.6억 | US$900만 | -US$2.6억 | US$2.7억 | US$3.4억 | US$4600만 | US$7300만 | US$1100만 | — | US$2.7억 | -US$3.7억 | US$17억 | US$16.1억 | US$16.1억 | US$50.8억 | 11.9% | — | 6.4% | — |
| 2021-12-31 | US$49.7억 | US$8.5억 | US$2.6억 | US$4.5억 | US$2.5억 | US$2억 | US$2.7억 | US$4000만 | US$4.3억 | US$1900만 | — | US$1.1억 | -US$14.4억 | US$16.1억 | US$7.2억 | US$7.2억 | US$42.3억 | 15.0% | — | 5.9% | — |
| 2022-12-31 | US$56.6억 | US$11억 | US$4.7억 | US$7.3억 | US$5.4억 | US$1.9억 | US$2.7억 | US$5400만 | US$4억 | US$4400만 | -US$7400만 | -US$1.4억 | -US$5.3억 | US$7.2억 | US$7.9억 | US$7.9억 | US$41.6억 | 16.2% | — | 7.9% | — |
| 2023-12-31 | US$66.4억 | US$14.7억 | US$7.7억 | US$9억 | US$6.8억 | US$2.2억 | US$2.7억 | US$5000만 | US$2.5억 | US$7300만 | -US$4.8억 | -US$2.2억 | -US$8.7억 | US$7.9억 | US$6.1억 | US$6.1억 | US$37.1억 | 18.1% | — | 8.0% | — |
| 2024-12-31 | US$74.3억 | US$18.4억 | US$11.6억 | US$13억 | US$9.8억 | US$3.2억 | US$2.8억 | US$6300만 | US$5억 | US$1.1억 | -US$3.7억 | -US$3.2억 | -US$10.3억 | US$6.1억 | US$5.7억 | US$5.6억 | US$33.2억 | 22.0% | — | 8.9% | — |
| 2025-12-31 | US$82.5억 | US$22.7억 | US$15.1억 | US$18.8억 | US$14.3억 | US$4.5억 | US$2.8억 | US$7300만 | US$7억 | US$1.8억 | -US$2.7억 | -US$4.4억 | -US$12.7억 | US$5.7억 | US$7.4억 | US$7.4억 | US$30.5억 | 24.8% | — | 8.1% | — |
Howmet Aerospace Inc. (HWM) trades at 36.0x forward earnings against a peer median of 20.6x. Its EV/EBITDA of 34.7x compares with a peer median of 16.3x. The comparison uses 4 peers: TransDigm Group Incorporated, General Dynamics Corporation, Northrop Grumman Corporation and RTX Corporation, as of 2026-09-28.
Howmet deployed $453M in capital expenditures in FY2025 (1.60x D&A and 5.49% of revenue) and management guided full-year 2026 capex above $500M, with additional step-ups planned in FY2027. Industry benchmark capex to depreciation stands at 0.95x and industry capex to revenue is 0.80%, confirming that Howmet's capital spending intensity significantly outpaces the broader aerospace and defense peer group.57
A bull cycle involves synchronized acceleration in commercial widebody aircraft production rates (A350 and 787), structural demand surges for terrestrial industrial gas turbines driven by data center power generation, and higher aftermarket spare blade intensity across CFM LEAP and Pratt & Whitney GTF engines. In this environment, consolidated operating margins expand past 26.8% and EPS compounds above 20% annually.
A bear cycle would be triggered by persistent airframe assembly bottlenecks at Boeing and Airbus slowing jet engine intake, supply shortages or cost surges in aerospace-grade titanium and nickel superalloys, and multi-year delays on three-year lead-time casting machinery. These factors would compress operating margins toward 22% and trigger severe multiple de-rating from current elevated forward P/E levels (35.97x) toward defense peer averages (16.8x-18.1x),.
Howmet occupies an exceptionally defensible position as the premier sole-source supplier of high-pressure turbine single-crystal castings and titanium fasteners. Proprietary manufacturing know-how, long flight certification cycles, and three-year equipment procurement lead times protect market share. However, near-term operational volume headroom is tightly constrained because only one casting pit remains unbooked across the company's manufacturing footprint, with existing capacity fully committed through 2028-2030. As a result, near-term revenue growth is bound to contracted delivery rates (~22.5% in FY2026 and ~13.7% in FY2027) rather than elastic volume surges.58
Under our Sell committee rating, no long position allocation is warranted. Even after recognizing Howmet's narrow moat, 21.5% ROIC, and fully booked casting pits through 2028-2030, the market price prices in unprecedented growth elasticity and multiple persistence (35.97x forward P/E). With downside risk evaluated at -62.4%, capital preservation mandates exiting long exposure.45
Risk management centers on capital preservation in the face of an extreme valuation disconnect. Howmet trades at a forward P/E of 35.97x and an EV/Revenue multiple far above defense prime peers (General Dynamics at 18.12x, Northrop Grumman at 16.77x, RTX at 24.12x). Our primary valuation anchor (FCFF DCF at $82.07 midpoint) and supporting owner earnings model ($81.31 midpoint) demonstrate that fair intrinsic value resides at $87.31. The risk of a sharp multiple contraction outweighs operational compounding. Portfolios holding HWM should systematically harvest capital, maintain a 5% trailing stop, and avoid entering fresh long positions.
While Howmet demonstrates premier aerospace manufacturing capabilities, sole-source engine casting moats, and a 21.53% ROIC exceeding its 9.41% WACC, the share price of $232.48 as of September 25, 2026 offers zero margin of safety against our $87.31 fair value midpoint. Fiduciary capital preservation mandates avoiding new exposure and liquidating existing positions.24
Trading at 35.97x forward earnings, Howmet carries an extreme multiple premium relative to diversified aerospace peers General Dynamics (18.12x forward P/E) and Northrop Grumman (16.77x forward P/E). Reverse DCF calculations show market pricing requires an unrealistic 21.75% 10-year growth hurdle, presenting severe downside multiple-compression risk.34
Although consensus forecasts indicate 22.46% revenue growth in FY2026 ($10,105.77M) and 13.68% in FY2027 ($11,487.74M), casting facilities are essentially fully booked with only one pit uncommitted through 2028-2030. Without uncontracted capacity to deliver positive volume surprises, the stock cannot sustain a 166.3% premium over fundamental fair value.15
Howmet Aerospace is a premier industrial business possessing a Narrow economic moat, 21.53% ROIC, and sole-source positions across critical rotating jet engine components. However, at $232.48 per share as of September 25, 2026, trading at 35.97x forward earnings, the stock trades at an untenable 166.3% premium to our fundamental fair value midpoint of $87.31.248
We recommend selling holdings to harvest capital gains, as current market pricing requires sustained 21.75% annual earnings growth over ten years while Howmet faces capacity limits through FY2027 and elevated capex exceeding $500M.
Capture your own thesis, position size, and follow-up questions. Stays on this device, only you can see it.
The records this analysis drew on, as they stood when it was run.
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
Acquisitions such as CAM introduce 20% margin business that dilutes Howmet legacy 30% fastening margins. A 300 bps compression below FY2025 operating margin of 24.79% to 21.8% would reverse post-split margin expansion toward historical levels, driving an estimated -18% fair value impact.457
Howmet currently trades at 35.97x forward P/E, while house models assume a 22.0x exit multiple. Diversified aerospace peers General Dynamics and Northrop Grumman trade at forward P/E multiples of 18.12x and 16.77x. A 20% contraction from the 22.0x base multiple to 17.6x reflects multiple de-rating, driving an estimated -19.5% fair value impact.34
Margin erosion below 21.80% indicates unabsorbed superalloy raw material price surges or ongoing dilution from acquired operations like CAM, reversing post-split margin expansion toward historical levels.
현재:24.79% in FY2025
다음이면 경고< 21.80% consolidated operating margin
Capital intensity exceeding 6.50% without corresponding volume increases indicates severe equipment cost escalation and multi-year cash flow drag before new casting capacity commissions.
현재:5.49% of revenue ($453M) in FY2025, guided >$500M in FY2026
다음이면 경고> 6.50% of revenue in FY2027 without volume expansion
Equipment commissioning slippage beyond 12 months creates delivery bottlenecks across committed airline engine programs, capping medium-term volume realization and increasing operational costs.
현재:On schedule with long-lead machinery pre-ordered
다음이면 경고> 12 months delay on coating and casting capacity buildouts
Free cash flow conversion falling below 80% breaks management's 90% target conversion policy, signaling working capital accumulation in unbilled blade inventory or customer delivery holdbacks.
현재:94.89% in FY2025 ($1,431M FCF on $1,508M net income),
다음이면 경고< 80.0% conversion of net income
| medium |
| 24-36 months |
| Pre-ordering long-lead deposition and casting machinery three years in advance and utilizing existing casting pit capacity to maximize interim volume throughput,.5 |
| Raw material cost spikes in aerospace-grade titanium and superalloys | medium | 6-12 months | Long-term customer contracts incorporating index-linked raw material pass-through provisions for titanium sponge and nickel superalloys.7 |
| Acquisition integration friction and margin dilution from acquired businesses | medium | 12-18 months | Commercial pricing harmonization, operational lean manufacturing deployment, and distribution integration to lift acquired CAM operations toward legacy 30% fastening margins.5 |
Convert the revenue and margin path into after-tax free cash flow, discount the annual per-share amounts and terminal value at WACC, then adjust for signed net debt per current share.
Add depreciation to net income, subtract maintenance capex, divide by diluted shares, and apply a normalized valuation multiple.
Solve for the growth rate that makes the model value equal the report-date share price.
The Bull scenario models accelerated commercial widebody assembly rates on the A350 and 787, rapid operationalization of multi-deposition coating lines, and aggressive expansion in terrestrial IGT capacity agreements. Surging aftermarket demand for LEAP-1B and Pratt & Whitney GTF spare aerofoils expands operating margins past 28.0%, driving valuation toward the upper bound of our fair value range at $106.76.5
Elevated growth capex of >$135M annually absorbs near-term free cash flow before expanding productive output; lead times of three years on exotic deposition machinery introduce execution risk.5
Validates management's ability to eliminate the 1,000 bps profitability gap between acquired CAM operations (20%) and legacy Howmet fasteners (30%) without sacrificing customer retention.5
High-margin aftermarket spare blades on LEAP-1B, Pratt & Whitney GTF, and military platforms (F-18, F-22, F-35) provide countercyclical protection against airframe delivery delays,.5
| $12.63B |
| $13.62B |
| $14.45B |
| Revenue growth | 21.9% | 13.8% | 10.4% | 7.8% | 6.1% |
| Operating margin | 24.4% | 25.1% | 25.8% | 25.9% | 25.9% |
| Operating income | $2.46B | $2.87B | $3.25B | $3.52B | $3.74B |
| Tax rate | 18.3% | 18.3% | 18.3% | 18.3% | 18.3% |
| NOPAT | $2.00B | $2.35B | $2.66B | $2.87B | $3.06B |
| Reinvestment | $401.00M | $445.98M | $451.77M | $431.10M | $427.92M |
| Reinvestment rate (of NOPAT) | 20.0% | 19.0% | 17.0% | 15.0% | 14.0% |
| Free cash flow to firm | $1.60B | $1.90B | $2.21B | $2.44B | $2.63B |
| Engine Products revenue | $5.27B | $6.00B | $6.62B | $7.14B | $7.58B |
| Fastening Systems revenue | $2.13B | $2.42B | $2.67B | $2.88B | $3.06B |
| Engineered Structures revenue | $1.41B | $1.60B | $1.77B | $1.91B | $2.03B |
| Forged Wheels revenue | $1.27B | $1.44B | $1.59B | $1.71B | $1.82B |
| Terminal growth | 3.0% | 3.0% | 3.0% | 3.0% | 3.0% |
Howmet demonstrates rigorous capital allocation discipline, balancing growth reinvestment with aggressive shareholder cash returns. Growth capex is prioritized to expand high-return casting pits and advanced coating lines, with capex guided above $500M in FY2026 compared to $453M in FY2025. Concurrently, management repurchases shares, steadily lowering diluted share count from 416M in FY2023 to 410M in FY2024 and 406M in FY2025,,. Balance sheet leverage remains conservative with total debt of $4,664M and net debt of $2,308M, representing a net debt weight of 4.79% in the capital structure. Management also absorbed bolt-on acquisitions like CAM while committing to return to pre-acquisition leverage levels.
Engine Products generated $4,327M in FY2025 revenue (52.44% of consolidated sales) and expanded segment operating margins near 30%.
Howmet's enterprise earnings and cash flow power are predominantly governed by jet engine manufacturing and maintenance cycles, magnifying sensitivity to commercial OEM build rates.
Operating income rose from $0.98 diluted EPS in FY2020 to $2,046M operating income (24.79% margin) in FY2025, outperforming peers General Dynamics (10.38%) and Northrop Grumman (11.60%).
Structural operational improvements, favorable contract pricing, and high-margin spare parts mix have driven post-split margin expansion, projected to reach 25.90% by FY2030 in the house forecast.
Capex increased to $453M in FY2025 (1.60x D&A) and is guided above $500M in FY2026, significantly above industry average capex-to-depreciation of 0.95x.
Active capacity buildouts in casting pits and coating lines absorb intermediate free cash flow before delivering productive volume from 2028 through 2030.
Diluted average shares declined from 416M in FY2023 to 410M in FY2024 and 406M in FY2025,,, with shares outstanding at 398.8M as of September 2026.
Consistent share repurchases enhance EPS compounding, providing an annual tailwind of 1.2% to per-share intrinsic value.
| 마진 |
|---|
| HWM | Howmet Aerospace Inc. | $92.7B | 36.0x | 10.2x | 34.7x | 34.7% | — |
| TDG | TransDigm Group Incorporated | $62.4B | 23.1x | 6.2x | 18.2x | — | 46.0% |
| GD | General Dynamics Corporation | $91.1B | 18.1x | 1.7x | 14.5x | 17.8% | 10.4% |
| NOC | Northrop Grumman Corporation | $72.5B | 16.8x | 1.7x | 12.0x | 27.0% | 11.6% |
| RTX | RTX Corporation | $255.3B | 24.1x | 2.7x | 18.1x | 12.3% | 12.7% |
| positive |
| Surging electrical power consumption from artificial intelligence data centers and industrial electrification is driving strong orders for terrestrial gas turbines, with Howmet capturing sole-source positions across large cored blade manufacturing,. |
| Global Defense Budget Escalation and Munitions Replenishment | positive | Heightened international security concerns are driving sustained replenishment of tactical fighter aircraft (F-35, F-22, F-18) and missile systems, sustaining steady high-margin defense component demand,. |
| Below $87.31 (Fair Value Midpoint) | Re-evaluate Only Upon Intrinsic Reset | Do not commit fresh capital until shares de-rate toward enterprise discounted cash flow value and forward multiples normalize toward peer averages. |
| Consolidated operating margin compressing below 23.50% |
| Downgrade normalized operating margin forecasts and accelerate immediate exit of remaining positions. |
| Capital expenditure pace | Annual capital expenditures tracking above $550M without volume expansion | Increase forecast reinvestment rate by 400 bps and lower normalized owner earnings projections. |
| Equipment commissioning lead times | Lead time slippage exceeding 6 months on coating and casting capacity buildouts | Lower house forecast revenue growth by 250 bps due to delivery bottlenecks. |
