UBS raised its price target on Howmet Aerospace Inc. (NYSE: HWM) to $260 from $228 while reiterating a Neutral rating.
The analyst noted that Howmet has continued to deliver strong operational performance, achieving record EBITDA margins and incremental gains supported by pricing strength, increased content per aircraft, and volume growth, despite higher headcount and operational complexity.
Looking ahead to 2026, aerospace growth is expected to accelerate as Boeing’s 737 MAX production recovers and widebody output increases. Spare parts demand remains robust across the portfolio, while gas turbine power demand is emerging as a more meaningful contributor to revenue growth. These dynamics are also expected to support continued margin expansion.
UBS acknowledged underestimating the valuation multiple investors are willing to assign to Howmet and sees upside to consensus estimates. However, at 36 times projected 2026 EBITDA—the highest multiple in its coverage—the firm believes much of the upside is already priced in. UBS noted that achieving parity with GE Aerospace’s valuation would require approximately a 40% EBITDA margin, implying significantly higher earnings than current consensus forecasts. The firm therefore maintained its Neutral stance.
