I'll research HWM (Howmet Aerospace) to build this earnings preview. Let me gather recent transcripts, releases, filings, news, and price data.Let me read the most recent earnings call and release, plus grab price data and broader news.Now let me get recent price action and the latest news/sentiment going into the print.I have what I need. Here's the earnings preview.
Howmet heads into this print with all the wind at its back — and a stock that reflects it. Shares closed at ~$291 on Aug 5, sitting at/near all-time highs, up roughly 22% from the ~$239 level in early April and having re-rated sharply higher after the strong Q1 print (the stock jumped from ~$256 to ~$273 on the May 7 report). Sentiment is euphoric heading in: Jim Cramer called Howmet Aerospace "one of my absolute favorite aerospace plays" and recommended to "buy it right here."
At ~$291 against the raised FY26 adjusted EPS guide of $4.94, the stock trades at ~59x forward earnings. The bar is high — this is a "beat-and-raise-or-get-punished" name, and HWM has delivered beat-and-raise for several consecutive quarters. The key question isn't whether the quarter is good; it's whether it's good enough to sustain the multiple.
Set by management on the May 7 call:
| Metric | Q2 2026 Guide | Implied Growth (vs. ~Q2'25) |
|---|---|---|
| Revenue | $2.40B (±$10M) | ~+17% |
| Adj. EBITDA | $765M (±$5M) | ~+30% |
| Adj. EBITDA margin | ~31.9% | ~+300 bps |
| Adj. EPS | $1.23 (±$0.01) | ~+30%+ |
The Q2 guide numbers are revenue of $2.4 billion, plus or minus $10 million; EBITDA of $765 million, plus or minus $5 million; earnings per share of $1.23, plus or minus $0.01, and these are incrementals of just about 51%. Note the guidance bands are extremely tight (±$0.01 on EPS), so the print itself should land close to plan — the action will be in the full-year raise and the qualitative tone.
Howmet raised FY26 guidance on the Q1 call, and the pattern of serial raises is the core bull thesis. Current FY26 framework:
Our full year guide numbers are revenue of $9.65 billion, plus or minus $75 million; EBITDA of $3.06 billion, plus or minus $35 million; earnings per share of $4.94, plus or minus $0.06 and free cash flow of $1.75 billion, plus or minus $50 million, and that's after increasing our capital expenditure once again.
Critically, the full year revenue growth guide, excluding the impact of M&A, rises from 10% to 14% — an organic acceleration on top of the M&A contribution. Given the momentum, another FY raise is the base-case expectation; anything short of a raise (or a merely in-line reiteration) could disappoint a stock priced for perfection.
Q1 was a blowout: revenue, adjusted EBITDA, adjusted EBITDA margin, and adjusted earnings per share all exceeded the high end of guidance. Revenue growth accelerated to 19% year over year, driven by strong growth across key end markets, and adjusted EBITDA margin expanded 320 basis points year over year to 32.0%.
Segment-level momentum to watch continuing:
Engine Products (the crown jewel): Revenue increased 29% to $1.25 billion. Segment Adjusted EBITDA was $458 million, up 44% year over year. Segment Adjusted EBITDA margin increased approximately 400 basis points year over year to 36.6%. The sustainability of these record ~36.6% margins is a key focus.
Spares is the profit engine: The combination of Commercial Aerospace, Defense Aerospace and Gas Turbine spares was up 36% to approximately $520 million. Spares revenue represents a larger portion of overall revenue now at 23% in the first quarter of 2026 versus 21% in the full year 2025 and 11% in the full year 2019. Commercial aero engine spares alone were up ~48%. High-margin spares mix is the swing factor for margins.
Gas Turbines / IGT: Gas turbine growth remained very strong with revenue up 39%, driven by increased demand for electricity generation, especially from natural gas for data centers.
Forged Wheels: the down-cycle continued but margins impressed — revenue increased 17% year over year, with 11% lower volumes in the commercial transportation market more than offset by aluminum/inflation pass-through; Segment Adjusted EBITDA increased 32% and margin rose ~350 bps to 30.5%. Watch for the commercial transportation inflection management flagged beginning in Q2.
Q2 is the first full quarter to include Consolidated Aerospace Manufacturing (CAM), which closed on April 6 for approximately $1.8 billion, using $1.65 billion of new debt and part of the Savannah disposal proceeds. Expect a noticeable step-up in the Fastening Systems segment and some optics complexity:
IGT / data-center gas turbine capacity — the biggest secular story. Watch for: (a) the 7th of 7 major customer contracts — negotiations regarding demand and capital investment have now been finalized for 6 out of 7 customers, with the last (a "very significant customer") expected to close in Q2; and (b) any update to the prior "doubling of demand over 3–5 years" framing. New capacity in Japan is due to start first production in Q4, so near-term IGT growth remains yield-driven.
GTF Advantage & LEAP-1B "Maverick" ramp — content-rich programs. Management expects the LEAP-1B changeover in H2 and 2027 to be a much bigger year for the GTF Advantage than 2026, with a steady climb through this year. Watch commentary on ramp pace and mix richness.
Build-rate assumptions vs. reality — HWM baked in the 737 at an average of 42 per month for the year, the 787 at 7 rising to 8 by Q4, the A320 at 62 per month and the A350 at 6 per month. Any Boeing/Airbus rate slippage is the main top-line risk; note HWM has been running ahead of build rates on restocking + share + price.
Legacy aftermarket durability — bears worry about CFM56/legacy fade. Management's stance remains constructive: commercial aero is expected to see growth every year for the balance of this decade and beyond, with the only debate being the angle of growth.
Capital returns & leverage — $300 million of stock repurchased in Q1 at ~$230, plus $150 million in April at ~$246; remaining authorization ~$1.05 billion. Post-CAM net leverage sits at 1.6x, expected to come down significantly through 2026. Watch buyback pace (note: shares are now ~$291, well above the repurchase prices), the deleveraging trajectory, and any dividend signal — management said the 2026 dividend will be higher than 2025 (already raised 20% to $0.12/quarter).
Balance sheet strength — Fitch upgraded Howmet to A- in Q1, four notches into investment grade, supporting appetite for further disciplined M&A.
Howmet enters the Q2 print firing on all cylinders — record Engine margins, a booming spares mix (~23% of revenue), a multi-year IGT/data-center tailwind, and a fortress balance sheet (A- rated, deleveraging). Q2 numbers should land tightly around the guide ($2.40B rev / $765M EBITDA / $1.23 EPS), so the report hinges on (1) the size of the full-year raise, (2) CAM's first full-quarter contribution and margin optics, (3) the 7th IGT customer contract, and (4) GTF Advantage/LEAP-1B ramp signals for 2027. With the stock near highs and priced for perfection, the risk/reward skews toward "great quarter, muted reaction unless the raise is meaningful." The multi-year growth story remains firmly intact; the debate is entirely about valuation and how much good news is already discounted.
(Note: figures and management commentary above are drawn from Howmet's Q1 2026 results/call on May 7, 2026; verify against the actual Q2 release and any consensus estimates, which were not available in my sources.)