The Trump rally spread beyond the megacaps and Magnificent Seven as dozens of stocks gapped up on Nov. 6. Aerospace and defense stock Howmet Aerospace (HWM) was among them, but shares got an extra boost from the company’s third-quarter results the same day.
Shares have now formed a three-weeks-tight pattern that offers a new entry at 120.71, which is also the stock’s all-time high. Although shares were lower on Monday, they remained above the 50-day moving average. Howmet stock is Monday’s selection for IBD 50 Growth Stocks To Watch.
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Sales grew 11% in the third quarter to $1.8 billion, while earnings of 71 cents per share increased 54% year over year.
Howmet makes engineered products for jet engines and spacecraft as well as for commercial trucks. Its products include fasteners, rings and coatings, aluminum alloy wheels and other components. Its aluminum bulkheads are used in fighter-jet engines such as the F-35.
Defense Stock Ranks Second In Group
Howmet stock ranks second in its industry group, according to IBD Stock Checkup, and has a Composite Rating of 98 and an EPS Rating of 96. The stock price has outperformed more than 90% of other stocks in the Investor’s Business Daily database in the past year, going by its Relative Strength Rating of 94.
Mutual funds own 62% of shares outstanding. More funds have been net buyers of the aerospace and defense stock in six out of the seven most recent quarters. In more recent weeks, strong institutional buying has earned the stock an Accumulation/Distribution Rating of B.
Analysts are bullish on the stock and expect profits to rise in 2024 and 2025. The consensus earnings estimate is a 44% increase to $2.66 per share in 2024. In 2025, they estimate profit will rise 19% to $3.17 a share.
Howmet is a top-12 holding of the Janus Henderson Forty Fund (JARTX), which is beating the S&P 500 this year with a 34% gain. The defense stock is also in the MFS Growth Fund (MFEGX). Both are part of the IBD Mutual Fund Index.
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