Howmet raises 2025 forecast on robust aerospace demand

Howmet Aerospace (HWM.N) raised its full-year 2025 profit and revenue forecasts, driven by robust aerospace demand and increased jet production from customers like Boeing and Airbus. The company now projects 2025 revenue between $8.08 billion and $8.18 billion and adjusted profit of $3.56 to $3.64 per share, building on strong Q2 results with revenue up 9.2% to $2.05 billion. Shares jumped 3.5% premarket on the news, despite Howmet's intention to pass on tariff-related cost increases.

Analysis

Howmet Aerospace (HWM) has raised its full-year 2025 guidance, reflecting strong underlying demand in the commercial aerospace sector. The company now expects revenue between $8.08 billion and $8.18 billion, tightening the previous range, and lifted its adjusted profit forecast to $3.56-$3.64 per share. This optimistic outlook is validated by a robust second quarter, where revenue increased 9.2% to $2.05 billion and adjusted earnings per share grew significantly to $0.91 from $0.67 year-over-year. The primary growth drivers are increased jet production rates from key customers like Boeing, whose 737 MAX deliveries rose to 206 in the first half from 135 a year earlier, and a surge in aftermarket parts orders as airlines extend the life of older aircraft. While the company faces cost headwinds from steel and aluminum tariffs, its strategy to pass on these costs via price hikes indicates confidence in its market position and pricing power. The immediate 3.5% premarket stock jump suggests investor confidence in this growth narrative and the company's ability to navigate supply chain pressures.

Key Decisions for Investors

• The combination of raised guidance, strong Q2 earnings, and dual tailwinds from both OEM and aftermarket demand presents a bullish case for Howmet, potentially justifying an overweight position.
• Investors should monitor the company's margin performance in subsequent quarters as a key indicator of its ability to successfully pass on tariff-related cost increases to customers.
• Howmet's positive outlook, particularly the commentary on Boeing's production ramp-up, can be viewed as a favorable read-through for other suppliers in the narrow-body aircraft supply chain.