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In the latest close session, Howmet (HWM) was up +1.87% at $189.25. The stock outpaced the S&P 500’s daily gain of 0.47%. Meanwhile, the Dow gained 0.11%, and the Nasdaq, a tech-heavy index, added 0.94%.
Coming into today, shares of the maker of engineered products for the aerospace and other industries had gained 8.48% in the past month. In that same time, the Aerospace sector lost 0.19%, while the S&P 500 gained 2.32%.
The investment community will be closely monitoring the performance of Howmet in its forthcoming earnings report. The company’s upcoming EPS is projected at $0.9, signifying a 26.76% increase compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $2.04 billion, reflecting a 11.3% rise from the equivalent quarter last year.
HWM’s full-year Zacks Consensus Estimates are calling for earnings of $3.57 per share and revenue of $8.12 billion. These results would represent year-over-year changes of +32.71% and +9.35%, respectively.
Investors should also note any recent changes to analyst estimates for Howmet. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Howmet is currently sporting a Zacks Rank of #2 (Buy).
Investors should also note Howmet’s current valuation metrics, including its Forward P/E ratio of 51.99. This valuation marks a premium compared to its industry average Forward P/E of 24.49.
It’s also important to note that HWM currently trades at a PEG ratio of 2.41. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company’s expected earnings growth trajectory. Aerospace – Defense stocks are, on average, holding a PEG ratio of 2.07 based on yesterday’s closing prices.
The Aerospace – Defense industry is part of the Aerospace sector. This industry currently has a Zacks Industry Rank of 91, which puts it in the top 37% of all 250+ industries.
