Howmet's Defense Aerospace Strength Seems Firm: More Upside Ahead?

Howmet Aerospace Inc. HWM is poised to benefit from the expanding defense budget, which remains an important growth catalyst. Though commercial aerospace continues to be the company’s primary growth driver, the defense aerospace market has also gained momentum, supported by steady government funding. In the second quarter of 2026, revenues from the defense aerospace market increased 11% year over year, accounting for 15% of HWM’s total revenues. In 2025, revenues from this market surged 21% year over year.

The growth was driven by strong demand for engine spares for the F-35 program and spare parts for legacy fighter jets, including the F-15 and F-16. Howmet is also expanding its focus on new programs, particularly in the drone and collaborative combat aircraft markets. With military aircraft programs expected to benefit from increased funding, the company is well-positioned to capture additional defense opportunities and contracts.

In February 2026, the House of Representatives passed the fiscal year 2026 Defense Appropriations Act, providing a total discretionary allocation of $838.7 billion. The increase in military funding bodes well for Howmet’s defense aerospace business and could support top-line growth in the quarters ahead.

Howmet is also benefiting from strong demand for industrial gas turbines. Revenues from the gas turbines market grew 38% year over year in the second quarter, providing another growth opportunity for the company. Strong defense spending, growing demand across military programs and robust industrial gas turbine demand should support Howmet’s growth in the coming quarters.

HWM’s Peers in the Defense Space

Among its major peers, Textron Inc.’s TXT defense businesses continue to benefit from military production, training demand and funded development programs. Textron’s Bell segment’s second-quarter 2026 revenues increased 6% year over year, driven largely by higher H-1 and MV-75 volume, while commercial helicopter deliveries rose to 36 from 32. Textron’s Bell segment completed the first two MV-75 wing structures, with labor hours declining across successive builds.

Its another peer, GE Aerospace’s GE Defense & Propulsion Technologies business, is benefiting from the rising demand for its propulsion & additive technologies, critical aircraft systems and aftermarket services in the defense sector. In the first half of 2026, GE Aerospace received a contract from Turkish Aerospace Industries (“TAI”) to continue integrating its F404 engine into Türkiye's Hurjet jet trainer. GE Aerospace also clinched a $1.4 billion deal for T408 engines to support the U.S. Marine Corps’ CH-53K helicopter fleet in the same period.

HWM's Price Performance, Valuation and Estimates

Shares of Howmet have surged 60% in the past year compared with the industry’s growth of 5.5%.

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From a valuation standpoint, HWM is trading at a forward price-to-earnings ratio of 49.47X, above the industry’s average of 34.1X.

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The Zacks Consensus Estimate for HWM’s 2026 earnings has been on the rise over the past 60 days.

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The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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