Research · Sep 3, 2026
[HWM] Howmet Aerospace Thesis 2026: Engine Products Anchors Commercial Aerospace Cycle Recovery
Howmet Aerospace Inc. FY2025 revenue ~$7.3-7.5B (+10-13%) with adj. EPS ~$2.90-3.00 reflecting continued commercial aerospace cycle recovery + Boeing 737 MAX + Airbus A320 production ramp + selected defense + selected industrial demand + selected pricing. Large US aerospace structural components + selected industrial products company; formed via Arconic split April 1, 2020 (separated Arconic Inc. into Howmet Aerospace [aerospace] + Arconic Corporation [specialty rolled aluminum]; Arconic emerged from Alcoa 2016 spin-off). Headquartered in Pittsburgh Pennsylvania. 4 segments: Engine Products ~$3.7B (~50% — turbine engine airfoils + structural castings; selected critical aerospace propulsion components for Boeing + Airbus + Pratt & Whitney + GE Aerospace + Rolls-Royce engines; aftermarket ~30-40% of segment recurring + high-margin) + Fastening Systems ~$1.5B (~21% — aerospace fasteners + selected) + Engineered Structures ~$1.1B (~15% — selected aerospace structures wing + fuselage) + Forged Wheels ~$1.0B (~14% — commercial truck forged aluminum wheels). Customer mix: Commercial aerospace OEM (Boeing + Airbus) 50% + Commercial aftermarket + engine makers 25% + Defense 15% + Industrial/commercial truck 10%. CEO John Plant since April 2020 (post-Arconic split; ex-Arconic Executive Chair + ex-TRW Automotive CEO 2011-2015 until ZF Friedrichshafen acquisition; ~25-year industrial executive career). Plant tenure executed Arconic split April 2020 + post-split aerospace focus + selected operational excellence + selected pricing leadership + commercial aerospace recovery + selected defense growth. Selected sole-source positions in critical aerospace components provide pricing power + selected long-term contract escalators 3-7%/yr. Capital return: dividend $0.32-0.36/share + buybacks $0.5-1B; net debt $2-3B; Baa2/BBB+ investment grade. FY2026 thesis: Engine Products growth + commercial aerospace cycle + pricing leadership + capital return acceleration. Risks: commercial aerospace cycle (Boeing 737 MAX), defense budget, commodity inflation.