NYSE:HWM

Stock Analysis Report

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Market Cap

US$13.9b

Last Updated

2021/07/23 01:34 UTC

Data Sources

Company Financials +

Executive Summary

Howmet Aerospace Inc. provides advanced engineered solutions for the aerospace and transportation industries in the United States, Japan, France, Germany, the United Kingdom, Mexico, Italy, Canada, Poland, China, and internationally. More Details


Snowflake Analysis

Reasonable growth potential and slightly overvalued.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: HWM is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: HWM's weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

-0.2%

HWM

0.4%

US Aerospace & Defense

0.4%

US Market


1 Year Return

105.3%

HWM

23.7%

US Aerospace & Defense

36.9%

US Market

Return vs Industry: HWM exceeded the US Aerospace & Defense industry which returned 23.5% over the past year.

Return vs Market: HWM exceeded the US Market which returned 35.1% over the past year.


Shareholder returns

HWMIndustryMarket
7 Day-0.2%0.4%0.4%
30 Day-4.4%-2.0%1.6%
90 Day1.2%2.9%2.7%
1 Year105.3%105.3%26.3%23.7%39.1%36.9%
3 Year99.7%51.2%21.8%-3.7%61.0%51.0%
5 Yearn/a73.5%29.9%122.5%97.8%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

35.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HWM ($32.33) is trading below our estimate of fair value ($50.07)

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


Price To Earnings Ratio

PE vs Industry: HWM is poor value based on its PE Ratio (103.3x) compared to the US Aerospace & Defense industry average (32.8x).

PE vs Market: HWM is poor value based on its PE Ratio (103.3x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: HWM is poor value based on its PEG Ratio (2.3x)


Price to Book Ratio

PB vs Industry: HWM is overvalued based on its PB Ratio (3.9x) compared to the US Aerospace & Defense industry average (2.7x).


Future Growth

How is Howmet Aerospace forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

45.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HWM's forecast earnings growth (45.4% per year) is above the savings rate (2%).

Earnings vs Market: HWM's earnings (45.4% per year) are forecast to grow faster than the US market (15.1% per year).

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

Revenue vs Market: HWM's revenue (10.9% per year) is forecast to grow faster than the US market (9.3% per year).

High Growth Revenue: HWM's revenue (10.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HWM's Return on Equity is forecast to be low in 3 years time (15.5%).


Past Performance

How has Howmet Aerospace performed over the past 5 years?

75.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HWM has a large one-off loss of $200.0M impacting its March 31 2021 financial results.

Growing Profit Margin: HWM's current net profit margins (2.8%) are higher than last year (2.7%).


Past Earnings Growth Analysis

Earnings Trend: HWM has become profitable over the past 5 years, growing earnings by 75.2% per year.

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

Earnings vs Industry: HWM had negative earnings growth (-28.8%) over the past year, making it difficult to compare to the Aerospace & Defense industry average (-15%).


Return on Equity

High ROE: HWM's Return on Equity (3.8%) is considered low.


Financial Health

How is Howmet Aerospace's financial position?


Financial Position Analysis

Short Term Liabilities: HWM's short term assets ($3.3B) exceed its short term liabilities ($1.7B).

Long Term Liabilities: HWM's short term assets ($3.3B) do not cover its long term liabilities ($5.6B).


Debt to Equity History and Analysis

Debt Level: HWM's debt to equity ratio (128.7%) is considered high.

Reducing Debt: HWM's debt to equity ratio has increased from 72.8% to 128.7% over the past 5 years.

Debt Coverage: HWM's debt is not well covered by operating cash flow (4.5%).

Interest Coverage: HWM's interest payments on its debt are not well covered by EBIT (2x coverage).


Balance Sheet


Dividend

What is Howmet Aerospace current dividend yield, its reliability and sustainability?

0.25%

Current Dividend Yield


Upcoming Dividend Payment

TodayJul 23 2021Ex Dividend DateAug 05 2021Dividend Pay DateAug 25 202120 days from Ex DividendBuy in the next 12 days to receive the upcoming dividend

Dividend Yield vs Market

Notable Dividend: HWM's dividend (0.25%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.31%).

High Dividend: HWM's dividend (0.25%) is low compared to the top 25% of dividend payers in the US market (3.52%).


Stability and Growth of Payments

Stable Dividend: HWM is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: HWM is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: HWM is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of HWM'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?

1.4yrs

Average management tenure


CEO

John Plant (67 yo)

1.25yrs

Tenure

US$39,091,008

Compensation

Mr. John C. Plant, FCA, has been the Co-Chief Executive Officer of Howmet Aerospace Inc. (Formerly known as Arconic Inc.) since April 01, 2020. Mr. Plant served as the Chief Executive Officer of Howmet Aer...


CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD39.09M) is above average for companies of similar size in the US market ($USD11.26M).

Compensation vs Earnings: John's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: HWM's management team is not considered experienced ( 1.4 years average tenure), which suggests a new team.


Board Members

Experienced Board: HWM's board of directors are not considered experienced ( 1.3 years average tenure), which suggests a new board.


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


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: HWM
  • Exchange: NYSE
  • Founded: 1888
  • Industry: Aerospace and Defense
  • Sector: Capital Goods
  • Market Cap: US$13.883b
  • Shares outstanding: 429.43m
  • Website: https://www.howmet.com

Number of Employees


Location

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

Listings


Biography

Howmet Aerospace Inc. provides advanced engineered solutions for the aerospace and transportation industries in the United States, Japan, France, Germany, the United Kingdom, Mexico, Italy, Canada, Poland,...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/07/23 01:34
End of Day Share Price2021/07/22 00:00
Earnings2021/03/31
Annual Earnings2020/12/31


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.