NYSE:ARNC

Stock Analysis Report

Executive Summary

Howmet Aerospace Inc. provides advanced engineered solutions for the aerospace and transportation industries.


Snowflake Analysis

Very undervalued with moderate growth potential.


Similar Companies

Share Price & News

How has Arconic's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ARNC's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-60.9%

ARNC

-8.3%

US Aerospace & Defense

-4.1%

US Market


1 Year Return

-65.2%

ARNC

-16.5%

US Aerospace & Defense

-14.9%

US Market

Return vs Industry: ARNC underperformed the US Aerospace & Defense industry which returned -13.4% over the past year.

Return vs Market: ARNC underperformed the US Market which returned -13.6% over the past year.


Shareholder returns

ARNCIndustryMarket
7 Day-60.9%-8.3%-4.1%
30 Day-76.0%-26.6%-19.1%
90 Day-78.0%-32.4%-23.4%
1 Year-65.1%-65.2%-15.0%-16.5%-13.2%-14.9%
3 Year-72.9%-73.5%1.4%-3.9%10.7%3.5%
5 Yearn/a32.0%19.7%28.5%14.5%

Price Volatility Vs. Market

How volatile is Arconic's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Arconic undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ARNC ($6.92) is trading below our estimate of fair value ($25.29)

Significantly Below Fair Value: ARNC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ARNC is good value based on its PE Ratio (6.6x) compared to the Aerospace & Defense industry average (14.7x).

PE vs Market: ARNC is good value based on its PE Ratio (6.6x) compared to the US market (12.9x).


Price to Earnings Growth Ratio

PEG Ratio: ARNC is good value based on its PEG Ratio (0.3x)


Price to Book Ratio

PB vs Industry: ARNC is good value based on its PB Ratio (0.7x) compared to the US Aerospace & Defense industry average (1.8x).


Next Steps

Future Growth

How is Arconic forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

22.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ARNC's forecast earnings growth (22.5% per year) is above the savings rate (1.7%).

Earnings vs Market: ARNC's earnings (22.5% per year) are forecast to grow faster than the US market (12.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: ARNC's revenue (1.7% per year) is forecast to grow slower than the US market (7.2% per year).

High Growth Revenue: ARNC's revenue (1.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ARNC's Return on Equity is forecast to be low in 3 years time (13.1%).


Next Steps

Past Performance

How has Arconic performed over the past 5 years?

47.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ARNC has a large one-off loss of $627.0M impacting its December 31 2019 financial results.

Growing Profit Margin: ARNC's current net profit margins (3.3%) are lower than last year (4.6%).


Past Earnings Growth Analysis

Earnings Trend: ARNC has become profitable over the past 5 years, growing earnings by 47.8% per year.

Accelerating Growth: ARNC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ARNC had negative earnings growth (-26.9%) over the past year, making it difficult to compare to the Aerospace & Defense industry average (3.4%).


Return on Equity

High ROE: ARNC's Return on Equity (10.2%) is considered low.


Next Steps

Financial Health

How is Arconic's financial position?


Financial Position Analysis

Short Term Liabilities: ARNC's short term assets ($5.8B) exceed its short term liabilities ($4.1B).

Long Term Liabilities: ARNC's short term assets ($5.8B) do not cover its long term liabilities ($8.8B).


Debt to Equity History and Analysis

Debt Level: ARNC's debt to equity ratio (128.5%) is considered high.

Reducing Debt: Insufficient data to determine if ARNC's debt to equity ratio has reduced over the past 5 years.


Balance Sheet

Inventory Level: ARNC has a high level of physical assets or inventory.

Debt Coverage by Assets: ARNC's debt is not covered by short term assets (assets are 1x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: ARNC is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: ARNC is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

What is Arconic's current dividend yield, its reliability and sustainability?

1.52%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate ARNC's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate ARNC's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ARNC's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ARNC's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ARNC's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.4yrs

Average management tenure


CEO

John Plant (65yo)

1.17s

Tenure

US$596,818

Compensation

Mr. John C. Plant, FCA, has been Executive Vice President at Northrop Grumman Space & Mission Systems Corporation since 2001 and has been its Member of Chief Executive Officer office since February 2002. M ...


Leadership Team

NamePositionTenureCompensationOwnership
John Plant
Chairman & CEO1.17yrsUS$596.82k0.20% $11.7m
Kenneth Giacobbe
Executive VP & CFO3.42yrsUS$1.91m0.043% $2.5m
Katherine Ramundo
Executive VP3.42yrsUS$2.91m0.028% $1.6m
Timothy Myers
Former Executive VP & Group President of Global Rolled Productsno dataUS$2.15mno data
Paul Luther
Director of Investor Relationsno datano datano data
Max Laun
VP, General Counsel and Chief Ethics & Compliance Officerno datano datano data
Esra Ozer
Chief Communications Officer and VP of Inclusion & Diversity12.25yrsno datano data
George King
Head of Corporate Developmentno datano datano data
Neil Marchuk
Executive Vice President of Human Resources1.08yrsno data0.032% $1.8m
L. Watts-Stanfield
Chief Financial Officer of Transportation & Construction Solutions and Member of Executive Council4.67yrsno datano data

3.4yrs

Average Tenure

53yo

Average Age

Experienced Management: ARNC's management team is considered experienced (3.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
John Plant
Chairman & CEO1.17yrsUS$596.82k0.20% $11.7m
Ernest O'Neal
Independent Director12.25yrsUS$297.49k0.0096% $550.1k
Rajiv Gupta
Independent Director3.42yrsUS$293.99k0.010% $596.7k
James Albaugh
Independent Director2.92yrsUS$290.49k0.0068% $389.0k
Ulrich Schmidt
Independent Director4.17yrsUS$315.49k0.0064% $368.8k
Sean Mahoney
Independent Director4.17yrsUS$315.49k0.0088% $504.6k
Christopher Ayers
Independent Director2.92yrsUS$298.99k0.0017% $99.0k
Amy Alving
Independent Director1.92yrsUS$247.15k0.0046% $267.6k
Michelle Kiely
Member of Community Advisory Board6.92yrsno datano data
Frank Sewell
Member of Community Advisory Board6.92yrsno datano data

3.8yrs

Average Tenure

66.5yo

Average Age

Experienced Board: ARNC's board of directors are considered experienced (3.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: ARNC insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Howmet Aerospace Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Howmet Aerospace Inc.
  • Ticker: ARNC
  • Exchange: NYSE
  • Founded:
  • Industry: Aerospace and Defense
  • Sector: Capital Goods
  • Market Cap: US$5.754b
  • Shares outstanding: 435.92m
  • Website: https://www.howmet.com

Number of Employees


Location

  • Howmet Aerospace Inc.
  • 201 Isabella Street
  • Suite 200
  • Pittsburgh
  • Pennsylvania
  • 15212-5872
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ARNCNYSE (New York Stock Exchange)YesCommon StockUSUSDOct 2016
ALU2XTRA (XETRA Trading Platform)YesCommon StockDEEUROct 2016
ALU2DB (Deutsche Boerse AG)YesCommon StockDEEUROct 2016
ARNC *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNOct 2016
ARNCSNSE (Santiago Stock Exchange)YesCommon StockCLUSDOct 2016
ARNCSWX (SIX Swiss Exchange)YesCommon StockCHCHFOct 2016
0TCULSE (London Stock Exchange)YesCommon StockGBUSDOct 2016
ARNC-UETLX (Eurotlx)YesCommon StockITEUROct 2016
ARNCWBAG (Wiener Boerse AG)YesCommon StockATEUROct 2016
ARNC.PRAMEX (NYSE MKT LLC)PFD SER AUSUSDNov 2016
ARNCBASE (Buenos Aires Stock Exchange)CEDEAR EACH 6 REP 1 COM USD1ARARSNov 2016
ARNC34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 SHSBRBRLMay 2017
HWM.WINYSE (New York Stock Exchange)COMUSUSDMar 2020

Biography

Arconic Inc. engineers, manufactures, and sells lightweight metals worldwide. It operates through two segments, Engineered Products and Forgings, and Global Rolled Products. The Engineered Products and Forgings segment produces and sells fastening systems and seamless rolled rings, investment castings, forged jet engine components, and forged aluminum commercial vehicle wheels, as well as extruded, machined, and forged aircraft parts that are used in aerospace, industrial, commercial transportation, and power generation end markets. It also offers various forged and machined metal products for various end markets. The Global Rolled Products segment provides aluminum sheets and plates, aluminum extruded and machined parts, integrated aluminum structural systems, and architectural extrusions that are used in the automotive, aerospace, building and construction, industrial, packaging, and commercial transportation end markets. The company sells its products directly to customers, as well as through distributors. Arconic Inc. was founded in 1888 and is based in Pittsburgh, Pennsylvania. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/02 04:02
End of Day Share Price2020/04/01 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.