Why Bernstein Is Buying the Dip in Howmet Aerospace (HWM) Stock
TLDR
- Bernstein says SpaceX’s plan to make its own turbine blades poses little threat to Howmet Aerospace (HWM)
- Howmet controls over 50% of the industrial gas turbine blade castings market
- Long-term supply agreements with all major turbine producers run to around 2030
- HWM reported Q2 EPS of $1.33 and revenue of $2.55 billion, both beating estimates
- Bernstein carries an Outperform rating with a $328 price target on HWM
Howmet Aerospace stock dipped after Elon Musk announced SpaceX plans to manufacture its own industrial gas turbine blades and vanes. But analysts at Bernstein are calling it a buying opportunity, not a warning sign.
HWM opened at $259.61 on Friday, well below Bernstein’s $328 price target, which implies around 24% upside from the August 28 closing price of $264.85.
SpaceX wants to install 20 gigawatts of behind-the-meter power capacity by end of 2027 for AI data centers in Bastrop, Texas. To do that, it plans to bring turbine blade production in-house.
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