Boeing and F-35 supplier Howmet Aerospace is the IBD Stock Of The Day for Friday. Shares of the engine manufacturer pushed to new highs after earnings news boosted shares past a buy point. Meanwhile, other defense stocks pulled back on budget-related comments from President Donald Trump.
Howmet Aerospace on Thursday reported a 40% increase in earnings to 74 cents per share, beating FactSet expectations for 72 cents. Revenue rose 9% to $1.9 billion, driven by a 13% increase in its commercial aerospace segment. Analysts anticipated $1.88 billion in sales.
Howmet expects Q1 earnings to range from 75 cents to 77 cents per share adjusted on $1.925 billion to $1.945 billion in sales. FactSet predicts Q1 earnings of 71 cents per share on $1.918 billion in revenue.
For 2025, Howmet Aerospace expects earnings to range from $3.13 to $3.21 per share adjusted on $7.93 billion to $8.13 billion in sales. FactSet forecasts full-year earnings of $3.20 per share, with $8.05 billion in sales.
Howmet also announced that it is raising its Q1 dividend by 25% to 10 cents per share.
JPMorgan on Friday raised its price target on Howmet Aerospace stock to 130 from 125, The Fly reported, noting a solid setup for shares in 2025 and beyond. The firm said there could be a slight decline in the margin rate after Q1, but still potential for it to exceed company guidance.
Truist noted there is some uncertainty around commercial aerospace build rates, but Howmet management indicated potential upside. Meanwhile, Howmet's end-markets remain "generally healthy," the firm wrote. Truist lifted its price target on HWM stock to 140 from 130 and kept a buy rating on the shares.
Trump Mulls Slashing Defense Budget
Meanwhile, other defense stocks retreated Friday after Trump on Thursday suggested military spending could be slashed in half.
"We're going to spend a lot less money," Trump said at a news conference ahead of talks with Russia and China. "One of the first meetings I want to have is with President Xi of China and President Putin of Russia. I want to say, 'Let's cut our military budget in half.' And we can do that. And I think we'll be able to."
Trump also stated he wants to restart nuclear arms control talks, with hopes the countries will move toward denuclearization. He criticized how much the U.S. is investing in rebuilding its nuclear deterrent, saying if the weapons were ever used it would probably be "oblivion."
Trump said he will attempt to convince the leaders of his plans once "we straighten it all out" in the Middle East and Ukraine.
Trump is also confident that China and Russia will comply with his demands. "We're going to have them spend a lot less money. We're going to spend a lot less money. And I know they're going to do it. They agreed to it," he said.
However, officials from China have stated the U.S. and Russia must first reduce their arsenal before considering talks, the AP reported.
"The U.S. and Russia should ... significantly and substantially reduce their nuclear arsenals and create the necessary conditions for other nuclear-armed states to join the nuclear disarmament process," China Foreign Ministry spokesperson Guo Jiakun said at a daily press briefing.
Lockheed Martin stock fell about 2% Friday following Trump's comments. Northrop Grumman retreated about 2.9%, while RTX fell 2.6%. AeroVironment slumped 2.1%. TransDigm and General Dynamics both eased more than 1% Friday.
Howmet Aerospace Stock
Howmet Aerospace was actionable Friday as shares surged 2.7% to a record high. That put HWM stock in a buy range above a 129.10 buy point for a three-weeks-tight pattern on the move. The latest pattern formed just above the buy zone from a flat base breakout on Jan. 15.
HWM stock has rallied more than 20% in 2025.
Howmet Aerospace is a member of the Leaderboard list.
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