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Is Howmet Aerospace’s (HWM) Refinancing Push Quietly Rewriting Its Capital Efficiency Story?

Simply Wall St · 2d ago
  • Recently, Howmet Aerospace issued US$500 million of 4.550% notes due 2032 to refinance about US$625 million of 5.90% notes maturing in 2027, a move expected to reduce annual interest expense by roughly US$14 million while BNP Paribas Exane began covering the stock with an Outperform rating.
  • This refinancing, alongside a double‑digit year‑on‑year revenue increase in Q3 and an Engine products beat, highlights management’s focus on strengthening the balance sheet while capitalizing on aerospace demand.
  • Next, we’ll examine how this refinancing effort, aimed at lowering interest costs, may influence Howmet Aerospace’s existing investment narrative.

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Howmet Aerospace Investment Narrative Recap

To own Howmet Aerospace, you need to believe that sustained demand for newer, fuel efficient commercial and defense aircraft will keep pulling through its high value engine and structural components. The recent US$500 million refinancing slightly lowers interest costs but does not meaningfully change the near term catalyst, which still hinges on aerospace build rates, or the key risk of OEM production or supply chain setbacks disrupting that demand.

The refinancing news ties most directly to Howmet’s ongoing debt and financing activities, including its recent bond offering and continued share repurchases. Together, these moves suggest management is tightening the capital structure around a business still closely linked to commercial aerospace cycles, where any slowdown in narrow body programs or engine deliveries could matter far more than modest interest savings.

But while the refinancing looks like a positive financial tweak, investors should still be aware of the concentration risk around a few major OEM customers and what could happen if...

Read the full narrative on Howmet Aerospace (it's free!)

Howmet Aerospace's narrative projects $10.3 billion revenue and $2.2 billion earnings by 2028. This requires 10.2% yearly revenue growth and about a $0.8 billion earnings increase from $1.4 billion today.

Uncover how Howmet Aerospace's forecasts yield a $232.15 fair value, a 22% upside to its current price.

Exploring Other Perspectives

HWM Community Fair Values as at Dec 2025
HWM Community Fair Values as at Dec 2025

Seven members of the Simply Wall St Community currently place Howmet’s fair value between about US$130 and US$232, with views spread across that full range. As you weigh those differing opinions, remember that the clearest near term driver remains aircraft production and engine program demand, which can quickly magnify both the upside and the downside in Howmet’s results.

Explore 7 other fair value estimates on Howmet Aerospace - why the stock might be worth 32% less than the current price!

Build Your Own Howmet Aerospace Narrative

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.