On Friday, RBC Capital Markets adjusted its outlook on Howmet Aerospace Inc. (NYSE:HWM (BMV:HWM)), raising the price target on the company's shares to $90.00, up from the previous $75.00, while reaffirming an Outperform rating. The action follows the company's first-quarter earnings report, which showed an adjusted earnings per share (EPS) of $0.57, surpassing both the analyst's and the consensus estimate of $0.52.
Howmet Aerospace experienced a revenue increase of 14% in the quarter, with a notable 23% year-over-year rise in commercial aerospace revenues. The company's free cash flow (FCF) for the quarter was reported at $95 million, which exceeded the consensus forecast of $52 million. Additionally, Howmet Aerospace demonstrated its commitment to shareholder returns by distributing approximately $170 million to its shareholders.
Despite a less favorable build rate forecast for the MAX aircraft, Howmet Aerospace has raised its full-year 2024 guidance. The strength observed in the quarter's performance was widespread across the company's operations. RBC Capital Markets highlighted that they anticipate capital allocation to be a significant catalyst for the company in the second half of 2024.
In summary, the firm's decision to increase the price target is based on the strong financial results reported by Howmet Aerospace in the first quarter of 2024, its effective capital management, and the positive outlook for the remainder of the year. The Outperform rating remains unchanged, reflecting the firm's confidence in Howmet Aerospace's performance and strategic initiatives.
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