What Would A Short Seller Say About Howmet Aerospace?
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Howmet Aerospace (HWM) stock lost 26.1% over the three months to November 2, while the S&P 500 lost 2.3%. A short seller betting the stock keeps falling would have to argue against results that beat the top of management’s own guidance.
On the October 29 call, management pointed to pressure from outside the company, noting “the Middle East was lower given the Iran conflict,” and that high jet fuel prices could affect some schedules into 2027. A problem outside a business is easier for an owner to wait out. Is that warning showing up anywhere in Howmet’s results yet?
A Short Seller Would Find Howmet Outgrowing Rivals
Not in the totals. If fuel and the conflict were hurting Howmet, a short seller would first ask why its rivals are doing better. They are not. Over each company’s own latest four quarters, Howmet’s revenue grew 22.0%, and none of five peers grew faster. The closest, TransDigm, grew 16.6%.
The second question is whether any weakness at Howmet goes back further than 2026. Howmet’s operating margin rose every year, climbing from 17.0% in the four quarters to September 2022 to 28.0% in the four quarters to September 2026. That is its highest at any quarter end in the past ten years. A short seller would find no weakness in Howmet’s reported totals for growth or margins. The Middle East slowdown management described was in air travel.
Howmet’s Management Named Its Own Pressures Too
Management was open about pressures of its own on the same call. The Forged Wheels business saw margins fall from both a year earlier and the previous quarter, a decline management attributed to passing through sharply higher aluminum costs.
Growth also costs money. Management said Howmet would invest at a higher level in 2027 and expects capital spending to stay high into 2028. Management said Howmet is probably now at seven new manufacturing plants and considering three more, adding that growth can be tough as well.
On the fuel warning itself, management said it does not expect any impact on Howmet’s spares deliveries through 2027. Those are the strains of a growing company, not of one losing sales.
Howmet Carries More Debt Than A Year Ago
For an owner, the strain shows on the balance sheet. Howmet’s total debt reached $4.62 billion at the end of September 2026, up from $3.35 billion a year earlier. Management noted the company drew commercial paper to support the CAM acquisition.
In the third quarter alone, Howmet bought back $500 million of its stock. The company paid an average of $265 a share, above the $212.99 close on November 2.
Even so, Howmet’s debt is small against the company’s market value: 5.5%, against 19.2% for the S&P 500.
What Howmet’s Owners Still Have Going For Them
Owners pay a high price for Howmet’s growth. The stock trades at 41.3 times its trailing earnings, against 22.8 for the S&P 500. That valuation is still below the 54.5 times investors paid at the end of September 2025.
Gas turbine revenue rose 45% in the third quarter, and spares revenue rose 30%. Management raised its 2026 revenue guidance to $10.3 billion. For 2027, the company expects about $11.5 billion, a forecast of 12% growth. That is close to half the 22.0% pace of the latest four quarters.
The outside pressure management named does not show in Howmet’s totals, so a short seller would have to argue about the price an owner pays rather than the results. When the company reports in February 2027, Howmet’s commercial aerospace growth, 32% in the third quarter, is the figure to watch.
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