What Happened?
Shares of aerospace and defense company Howmet (NYSE:HWM) jumped 8% in the afternoon session after the company reported impressive first-quarter 2025 results. Despite in-line revenue, Howmet beat EBITDA and EPS expectations. We were also impressed by Howmet's optimistic full-year EBITDA guidance, which beat analysts' expectations. Full-year EPS guidance was also raised.
On the other hand, its Engine products revenue missed and its full-year revenue guidance fell slightly short of Wall Street's estimates. Overall, we think this was still a solid quarter with some key areas of upside.
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What The Market Is Telling Us
Howmet’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 29 days ago when the stock dropped 8.6% on the news that President Trump announced "reciprocal tariffs" on all US imports, set at a minimum rate of 10% or more. Markets reacted negatively to the announcement, reflecting deep concerns among investors about the broader economic implications. The tariffs were likely seen as a significant threat to global trade flows, with the potential to slow economic growth, drive up consumer prices, and spark retaliatory measures.
Wedbush analyst Dan Ives captured the prevailing market anxiety, stating, "We would characterize this slate of tariffs as 'worse than the worst case scenario' the Street was fearing." His comment highlighted how the scope and severity of the tariffs far exceeded Wall Street's expectations, adding a new layer of uncertainty for businesses and investors.
Howmet is up 35.4% since the beginning of the year, and at $150.07 per share, has set a new 52-week high. Investors who bought $1,000 worth of Howmet’s shares 5 years ago would now be looking at an investment worth $11,967.
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