Howmet Aerospace heads into its August 6 earnings report with analysts raising targets faster than the stock itself is moving — a setup where the Street appears to be playing catch-up rather than leading.
The analyst story is unambiguously positive, and the conviction is building. TD Cowen lifted its target to $320 from $300 on July 13. Jefferies pushed further, raising to $340 from $320 on July 9. Both maintained Buy ratings. Those moves follow a wave of upgrades after the May earnings print, when JPMorgan raised to $310 and BofA's cadre of aerospace analysts consistently marked numbers higher across the board. The consensus mean now sits at $311.68 against a current price of $272.43 — roughly 14% implied upside. The direction of travel on analyst targets has been one-way for months. That said, UBS holds a Neutral rating with a $290 target, suggesting at least one voice on the Street sees the stock as fairly priced at these levels.
Options positioning reinforces the bullish lean. The put/call ratio has dropped sharply to 0.87 from levels above 1.05 through most of June — now running well below its 20-day average of 0.95, at 1.4 standard deviations below the mean. That's a meaningful shift: call demand is clearly outpacing put buying, consistent with investors positioning for upside into the print rather than hedging against disappointment. The 52-week PCR range is wide (0.58 low to 1.57 high), so the current reading sits in the more constructive half of the annual range.
Short interest tells a quiet story here. Bears have been covering steadily — SI has fallen nearly 25% over the past month, now at just 1.9% of the free float. That's a low absolute level, and the direction of the unwind has been consistent since mid-June, when shares short were close to 10 million. Borrow conditions are extremely loose, with availability effectively unconstrained at the maximum reading, meaning there is no squeeze mechanics at play. Cost to borrow is only 0.42%, despite a week-on-week uptick — there is simply no meaningful short-side pressure on this name. The ORTEX short score has eased from 32.5 to 31.7 over the past two weeks, reflecting the same retreat.
The bull case rests on Howmet's positioning across commercial aerospace, defense, and industrial gas turbines — with the IGT business benefiting directly from data center power demand, which analysts argue could double that segment's revenue. Bears counter with two credible concerns: airline capacity erosion from geopolitical tensions (specifically the Iran conflict and fuel prices), and the risk that spare-parts demand fades as OEM production accelerates and newer engine generations prove more durable. On valuation, the stock is not cheap — PE sits near 48x and EV/EBITDA at 32.9x, both down modestly over the past month but still well above historical norms. EPS surprise scores in the 80th percentile and 90-day EPS momentum ranks in the 78th, which has historically been the fuel that keeps premium multiples alive.
The earnings track record supports cautious optimism. The May 7 print produced a 5.5% one-day gain and a 6.2% five-day gain — the strongest recent reaction on record. Historical earnings moves have been positive, though the dataset is limited. Among peers, HXL gained nearly 5% on the week while FTAI fell 8.7% and CW dropped 6.2% — a divergent week for aerospace suppliers that leaves HWM as a relative outperformer, up just 0.6% but notably stable against a sector that sold off. The question heading into August 6 is whether Howmet's engine component volumes and IGT order book can validate the target-price creep — or whether the valuation premium leaves little room for anything short of another beat-and-raise.
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