Yahoo Finance Results: Howmet Aerospace Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates
Investors in Howmet Aerospace Inc. (NYSE:HWM) had a good week, as its shares rose 6.3% to close at US$36.56 following the release of its quarterly results. The result was positive overall - although revenues of US$1.3b were in line with what the analysts predicted, Howmet Aerospace surprised by delivering a statutory profit of US$0.31 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for Howmet Aerospace
After the latest results, the nine analysts covering Howmet Aerospace are now predicting revenues of US$5.62b in 2022. If met, this would reflect a notable 10% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 89% to US$1.39. Before this earnings report, the analysts had been forecasting revenues of US$5.62b and earnings per share (EPS) of US$1.39 in 2022. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of US$40.55, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Howmet Aerospace, with the most bullish analyst valuing it at US$43.00 and the most bearish at US$36.00 per share. This is a very narrow spread of estimates, implying either that Howmet Aerospace is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that Howmet Aerospace is forecast to grow faster in the future than it has in the past, with revenues expected to display 14% annualised growth until the end of 2022. If achieved, this would be a much better result than the 24% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 6.9% per year. So it looks like Howmet Aerospace is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$40.55, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Howmet Aerospace. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Howmet Aerospace going out to 2024, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Howmet Aerospace (1 is potentially serious) you should be aware of.
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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.
