Elon Musk’s Tweet Scared Howmet Investors. It Shouldn’t Have.

Jabran Kundi

Thu, September 3, 2026 at 5:32 PM GMT+3 5 min read

Howmet Aerospace Inc_ on screen in front of business webpage_ By Timon

On Aug. 30, Elon Musk tweeted that SpaceX (SPCX) will start casting its own gas turbine blades and vanes at a foundry in Texas. And when the richest man in the world makes a statement, the world takes notice. The market worried about the impact this could have on Howmet Aerospace (HWM), and its stock fell roughly 8% in a single trading session. The blades Musk wrote about sit in the hottest part of a turbine, and they are one of the main bottlenecks slowing down new power plants. Musk said building them in-house could bring turbines online up to 18 months sooner, feeding the power needs of SpaceX's AI data centers. Investors heard "new competitor" and sold. In my opinion, that may have been an overreaction.

The only reason SpaceX has to build its own foundry is that Howmet and the firms like it are sold out. Just four companies in the world cast these blades at scale, and together they control around 70% to 80% of the market. So several analysts read the news as a sign of strength. Bernstein, which had lifted its price target to $328 just days earlier, called the selloff a buying opportunity. Citi and Jefferies pushed back too.

More News from Barchart

Here's What the Market Missed

Normally, a company buys these blades from a specialist like Howmet. This is because casting them is extraordinarily difficult and takes years to master. Building your own foundry from scratch is the expensive and slow option nobody takes unless they have to. So SpaceX deciding to build its own foundry shows just how tight supply has become. Speaking of difficulty, Jefferies estimates SpaceX is still about four years from meaningful output.

Investors should also keep in mind that Howmet's own numbers remain strong. Last quarter, revenue rose 24%, and earnings jumped 46%. The dip may have created an entry point.

About Howmet Aerospace Stock

Howmet Aerospace offers advanced engineered solutions for the aerospace and transportation industries. The company operates in the Engineered Structures, Engine Products, Forged Wheels, and Fastening Systems segments. Its primary business focus is on providing components for aircraft engines, airframe structures, and fastening systems.

Over the past year, Howmet Aerospace stock performed well compared to the S&P 500 ($SPX). HWM stock generated about 49% gains. In comparison, the broader index posted returns of around 20% during the same period. It has added 27% so far in 2026, meaning much of the twelve-month gain has come in 2026.

www.barchart.com

Howmet Aerospace's valuation is where the caution comes in. The forward GAAP price-to-earnings (P/E) of 44.64x is about 19% above its 5-year average of 37.41x. The forward price-to-sales (P/S) ratio of 9.67x is steeper, sitting nearly 80% above its 5-year average of 5.38x. Both measures indicate the stock is trading at a premium to its history. The market is paying up for Howmet's grip on a scarce, fast-growing corner of the AI power buildout. The EPS outlook is solid, though it shows growth slowing down yearly. Analysts expect earnings to grow 41% in 2026, 20% in 2027, 19% in 2028, and 14% in 2029. That is dependable growth for an industrial supplier, even as the pace eases.

The balance sheet is decent. Howmet holds $563 million in cash against $4.66 billion in debt. The resulting net debt of slightly over $4 billion is modest for a company this size. Overall, the business is strong, and the demand is real. But HWM stock already reflects a lot of good news, so whether the premium is justified or stretched remains debatable.

Howmet Raises 2026 Guidance After Strong Second Quarter

Howmet Aerospace delivered a strong second quarter, with revenue, EPS, EBITDA, and EBITDA margin all coming in above the high end of guidance. EBITDA grew 39% year-over-year (YoY), while EBITDA margin reached 32.1%. The company ended the quarter with $564 million in cash and $479 million in free cash flow.

For the third quarter, management expects revenue to be $2.575 billion, with a possible variation of $10 million. Earnings are projected to be $1.35 per share, while EBITDA is estimated at $830 million. Howmet Aerospace raised its full-year 2026 revenue guidance to $10.05 billion. Moreover, EPS and EBITDA guidance were also increased to $5.27 and $3.23 billion, respectively.

What Are Analysts Saying About HWM Stock?

On Aug. 24, Bernstein turned more bullish on Howmet Aerospace and lifted its price target on the shares. The firm raised its price target on HWM stock from $318 to $328 and maintained a "Buy" rating. In addition to Bernstein, Citi also increased its price target from $311 to $329 while keeping a "Buy" rating.

The stock carries a consensus "Strong Buy" rating from 23 Wall Street analysts covering it. Based on their estimates, it has an average price target of $332.57, suggesting around 30% upside from current levels. The highest price target is $375, which points to an additional 47% upside from the current share price.