Howmet Aerospace

Howmet Aerospace

HWM

$ 117.65

$2.90 2.53% 4%

IBD Stock Analysis

• Nears 120.71 buy point from shallow cup base
• Already actionable from clearing early entry
• Relative strength at record high

Composite Rating

99/99

Industry Group Ranking

37/197

Emerging Pattern

Cup

Cup

A cup-shaped pattern with no handle. Must be at least six weeks long or as long as a year. Buy point is 10 cents above the left-side high.

* Not real-time data. All data shown was captured at 12:55PM EST on 01/14/2025.

Howmet Aerospace (HWM) is the IBD Stock Of The Day as it shows relative strength ahead of a potential breakout. After soaring in 2024, Howmet stock is in range from an early entry as well.

Aerospace stocks could see the U.S. strengthen its defense budget under incoming President Donald Trump. Rising geopolitical tensions should boost defense stocks in the new year.

Howmet, a Boeing (BA) supplier, shows strong and accelerating growth. Howmet stock popped on Nov. 6 after Trump's election win, and the company lifted its earnings outlook the same day.

Howmet Aerospace Stock Performance

HWM shares advanced 2.5% to 117.64 in Tuesday's stock market action. Howmet Aerospace stock shows a 120.71 buy point from a shallow cup base, according to MarketSurge charts. The stock is already actionable from clearing last week's high of 115.16 and extending Monday's move from the 50-day moving average.

HWM stock more than doubled in 2024, one of the S&P 500's top performers. It has nearly tripled over the past two years on the back of a series of breakouts to record highs.

The relative strength line for HWM stock is making a new high ahead of a potential breakout, an especially bullish sign. That is marked by the blue dot at the end of the RS line on the weekly chart. That strength indicator shows a long-term uptrend as well. A rising RS line means that a stock is outperforming the S&P 500 index. It is the blue line in the chart provided.

A 94 RS Rating means that Howmet has outpaced 94% of all stocks in IBD's database over the past year.

In IBD's aerospace and defense industry group, RocketLab (RKLB) holds a perfect 99 RS score. FTAI Aviation (FTAI) earns a 97 score and Embraer (ERJ) a 93. All four defense stocks hold a place in the IBD 50 list of top growth stocks.

RocketLab stock is nearing a test of 50-day support after surging in late 2024. FTAI stock and Embraer stock are also pulling back to their 50-day lines but not far from buy points.

IBD named Howmet and FTAI among this week's top stocks to watch that are near buy points.

Last week's stock and bond sell-off shifted the stock market status. Investors could consider putting off new purchases and working on watchlists instead as they wait for the next confirmed uptrend.

Howmet Aerospace Earnings Accelerate

The IBD Stock Checkup tool shows that Howmet Aerospace stock carries a perfect Composite Rating of 99. The rating rolls various fundamental and technical metrics into one easy-to-use score.

It holds an EPS Rating of 95 out of a best-possible 99.

Over the past three quarters, Howmet Aerospace grew earnings per share at a 47% average clip, well above the three-year rate of 37%. Further, the stock shows two quarters of accelerating earnings growth.

In the third quarter of 2024, Howmet earnings growth reached 54% as sales rose 11%. Results were driven by growth in the commercial aerospace market, including recovery for wide-body jets, the company said. Spare engine volumes and demand for fastening systems both increased.

"We are pleased that the Boeing strike was settled on Nov. 4, and we look forward to Boeing's gradual production recovery," Howmet CEO John Plant said in the Nov. 6 Q3 earnings release.

Turning to 2025, Plant said commercial aerospace demand remains robust, as air traffic grows.

Boeing And Defense Stocks

Notably, Boeing's production troubles mean that older planes are flying for longer. That has created "significant needs for additional engine spare parts," which supports future growth, Plant said.

However, Plant said Howmet remains cautious about "the assumed pace of new aircraft builds." The company was hurt by Boeing's reduced aircraft builds in previous years.

All in, Plant said he expects growth in the defense, aerospace and industrial markets this year, offset by continued softness in commercial transportation.

Analysts expect a 45% earnings jump for 2024 and a 19% gain in 2025, MarketSurge shows.

Share buybacks, cash generation and debt reduction have also boosted this aerospace and defense play. In this young year, Howmet stock is up 7%, extending its massive rally over the past two years.

Please follow Aparna Narayanan on X @IBD_Aparna for more coverage.

YOU MAY ALSO LIKE:

Best Growth Stocks To Buy And Watch: See Updates To IBD Stock Lists

Looking For The Next Big Stock Market Winners? Start With These 3 Steps

Join IBD Live And Learn Top Chart Reading And Trading Techniques From Pros

Learn How To Time The Market With IBD's ETF Market Strategy