Howmet Aerospace Inc.

HWM

Rolling Drawing & Extruding of Nonferrous Metals

Mkt Cap

$34.81B

PE

40.57

Debt

$3.898B

Cash

$534M

EV

$38.17B

FCF

$818M

Market Cap

$34.81B

P/E Ratio

40.57

Debt

$3.898B

Cash

$534M

EV

$38.17B

FCF

$818M

Charts data: {"Earnings":[{"time":"2014-12-30","value":177000000},{"time":"2015-12-30","value":-391000000},{"time":"2016-12-30","value":-1010000000},{"time":"2017-12-30","value":-127000000},{"time":"2018-12-30","value":640000000},{"time":"2019-12-30","value":468000000},{"time":"2020-12-30","value":259000000},{"time":"2021-12-30","value":256000000},{"time":"2022-12-30","value":467000000},{"time":"2023-12-30","value":763000000}],"Sales":[{"time":"2014-12-30","value":23906000000},{"time":"2015-12-30","value":22534000000},{"time":"2016-12-30","value":12394000000},{"time":"2017-12-30","value":12960000000},{"time":"2018-12-30","value":14014000000},{"time":"2019-12-30","value":14192000000},{"time":"2020-12-30","value":5259000000},{"time":"2021-12-30","value":4972000000},{"time":"2022-12-30","value":5663000000},{"time":"2023-12-30","value":6640000000}],"Net Margins":[{"time":"2014-12-30","value":0.007403998996067932},{"time":"2015-12-30","value":-0.017351557646223485},{"time":"2016-12-30","value":-0.08149104405357431},{"time":"2017-12-30","value":-0.009799382716049384},{"time":"2018-12-30","value":0.04566861709718852},{"time":"2019-12-30","value":0.032976324689966176},{"time":"2020-12-30","value":0.04924890663624263},{"time":"2021-12-30","value":0.05148833467417538},{"time":"2022-12-30","value":0.08246512449231856},{"time":"2023-12-30","value":0.11490963855421686}],"Assets":[{"time":"2014-12-30","value":37399000000},{"time":"2015-12-30","value":36528000000},{"time":"2016-12-30","value":20038000000},{"time":"2017-12-30","value":18718000000},{"time":"2018-12-30","value":18693000000},{"time":"2019-12-30","value":17578000000},{"time":"2020-12-30","value":11443000000},{"time":"2021-12-30","value":10219000000},{"time":"2022-12-30","value":10255000000},{"time":"2023-12-30","value":10428000000}],"Stockholders Equity":[{"time":"2014-12-30","value":14794000000},{"time":"2015-12-30","value":14131000000},{"time":"2016-12-30","value":5141000000},{"time":"2017-12-30","value":4924000000},{"time":"2018-12-30","value":5585000000},{"time":"2019-12-30","value":4621000000},{"time":"2020-12-30","value":3577000000},{"time":"2021-12-30","value":3508000000},{"time":"2022-12-30","value":3601000000},{"time":"2023-12-30","value":4037000000}],"ROE":[{"time":"2014-12-30","value":0.011964309855346762},{"time":"2015-12-30","value":-0.02766966244427146},{"time":"2016-12-30","value":-0.19645983271737016},{"time":"2017-12-30","value":-0.025792038992688872},{"time":"2018-12-30","value":0.11459265890778872},{"time":"2019-12-30","value":0.10127677991776672},{"time":"2020-12-30","value":0.07240704500978473},{"time":"2021-12-30","value":0.07297605473204105},{"time":"2022-12-30","value":0.12968619827825603},{"time":"2023-12-30","value":0.18900173396086203}],"ROA":[{"time":"2014-12-30","value":0.025936522366908205},{"time":"2015-12-30","value":0.02042268944371441},{"time":"2016-12-30","value":0.045563429483980435},{"time":"2017-12-30","value":0.05160807778608826},{"time":"2018-12-30","value":0.07088214839779597},{"time":"2019-12-30","value":0.05888041870519968},{"time":"2020-12-30","value":0.05470593375862973},{"time":"2021-12-30","value":0.07319698600645856},{"time":"2022-12-30","value":0.08961482203803023},{"time":"2023-12-30","value":0.11536248561565017}]}

Howmet Aerospace Inc. provides advanced engineered solutions for the aerospace and transportation industries in the United States, Japan, France, Germany, the United Kingdom, Mexico, Italy, Canada, Poland, China, and internationally. It operates through four segments: Engine Products, Fastening Systems, Engineered Structures, and Forged Wheels. The Engine Products segment offers airfoils and seamless rolled rings primarily for aircraft engines and industrial gas turbines; and rotating and structural parts. The Fastening Systems segment produces aerospace fastening systems, as well as commercial transportation, industrial, and other fasteners; and latches, bearings, fluid fittings, and installation tools. The Engineered Structures segment provides titanium ingots and mill products, aluminum and nickel forgings, and machined components and assemblies for aerospace and defense applications; and titanium forgings, extrusions, and forming and machining services for airframe, wing, aero-engine, and landing gear components. The Forged Wheels segment offers forged aluminum wheels and related products for heavy-duty trucks and commercial transportation markets. The company was formerly known as Arconic Inc. Howmet Aerospace Inc. was founded in 1888 and is based in Pittsburgh, Pennsylvania.

Sector

10-Q
9/30/23
10-Q
6/30/23
10-Q
3/31/23
10-K
12/31/22
10-Q
9/30/22
10-Q
6/30/22
10-Q
3/31/22
10-K
12/31/21
10-Q
9/30/21
10-Q
6/30/21
10-Q
3/31/21
10-K
12/31/20
10-Q
9/30/20
10-Q
6/30/20
10-Q
3/31/20
10-K
12/31/19
10-Q
9/30/19
10-Q
6/30/19
10-Q
3/31/19
10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Howmet Aerospace Inc.

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$818M	$916.2M	$1.019B	$1.126B	$1.234B	$1.344B	$1.453B	$1.56B	$1.662B	$1.758B	$1.846B	$18.46B
DCF		$796.7M	$770.5M	$740M	$705.7M	$668.3M	$628.2M	$586.4M	$543.3M	$499.7M	$456.3M	$4.563B
Value	$10.96B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 0.7%

Earnings Stability -40%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	-1.7%	-8.1%	-0.98%	4.6%	3.3%	4.9%	5.1%	8.2%	11%	13%
ROA	2%	4.6%	5.2%	7.1%	5.9%	5.5%	7.3%	9%	12%	12%
ROE	-2.8%	-20%	-2.6%	11%	10%	7.2%	7.3%	13%	19%	21%

What is the average Net Margin?

The average Net Margin over the past 5 years is +6.28%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +1.42%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +7.71%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +0.95%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +11.33%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +1.31%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	22.64	-31.70	65.19	-12.22	-38.57	-21.13	16.95	7.71	5.74	4.77
Debt Equity	0.64	1.57	1.39	1.21	1.50	1.52	1.21	1.16	0.97	0.95
MIN
Graham Stability	-	-	-	-	-	79%	56%	100%	100%	56%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 4.77.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 7.62.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.56.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has been increasing in past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	-8.5%	-14%	8.1%	17%	3%
Net Income	-	3.6%	43%	63%	31%
Stockholders Equity	-3.4%	-6.3%	4.1%	12%	3.9%
FCF	-	-	-	26%	9.7%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is -13.88%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +2.96%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +3.58%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +30.76%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is -6.29%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +3.9%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is -.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +9.71%.