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Howmet (HWM) Exceeds Market Returns: Some Facts to Consider

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In the latest trading session, Howmet (HWM - Free Report) closed at $114.75, marking a +1.87% move from the previous day. The stock outperformed the S&P 500, which registered a daily gain of 0.16%. Elsewhere, the Dow saw an upswing of 0.86%, while the tech-heavy Nasdaq depreciated by 0.38%.

The maker of engineered products for the aerospace and other industries's shares have seen a decrease of 0.7% over the last month, surpassing the Aerospace sector's loss of 3.17% and the S&P 500's loss of 2.2%.

Investors will be eagerly watching for the performance of Howmet in its upcoming earnings disclosure. The company's upcoming EPS is projected at $0.71, signifying a 33.96% increase compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $1.87 billion, indicating an 8.21% upward movement from the same quarter last year.

Investors should also pay attention to any latest changes in analyst estimates for Howmet. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Right now, Howmet possesses a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that Howmet has a Forward P/E ratio of 35.44 right now. This valuation marks a premium compared to its industry's average Forward P/E of 17.57.

Meanwhile, HWM's PEG ratio is currently 1.27. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The average PEG ratio for the Aerospace - Defense industry stood at 1.39 at the close of the market yesterday.

The Aerospace - Defense industry is part of the Aerospace sector. At present, this industry carries a Zacks Industry Rank of 184, placing it within the bottom 27% of over 250 industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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