In the latest trading session, Howmet (HWM – Free Report) closed at $110.79, marking a +1.3% move from the previous day. The stock’s change was more than the S&P 500’s daily loss of 0.22%. At the same time, the Dow lost 0.36%, and the tech-heavy Nasdaq lost 0.16%.
Shares of the maker of engineered products for the aerospace and other industries have depreciated by 8.93% over the course of the past month, underperforming the Aerospace sector’s loss of 4.97% and the S&P 500’s loss of 2.36%.
The upcoming earnings release of Howmet will be of great interest to investors. The company’s earnings per share (EPS) are projected to be $0.71, reflecting a 33.96% increase from the same quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $1.87 billion, reflecting an 8.07% rise from the equivalent quarter last year.
Investors should also take note of any recent adjustments to analyst estimates for Howmet. These revisions typically reflect the latest short-term business trends, which can change frequently. Consequently, upward revisions in estimates express analysts’ positivity towards the company’s business operations and its ability to generate profits.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To exploit this, we’ve formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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. Within the past 30 days, our consensus EPS projection remained stagnant. At present, Howmet boasts a Zacks Rank of #3 (Hold).
In the context of valuation, Howmet is at present trading with a Forward P/E ratio of 34.41. For comparison, its industry has an average Forward P/E of 17.94, which means Howmet is trading at a premium to the group.
We can also see that HWM currently has a PEG ratio of 1.23. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company’s expected earnings growth trajectory. Aerospace – Defense stocks are, on average, holding a PEG ratio of 1.41 based on yesterday’s closing prices.
The Aerospace – Defense industry is part of the Aerospace sector. Currently, this industry holds a Zacks Industry Rank of 162, positioning it in the bottom 36% of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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