Howmet Aerospace ( NYSE: HWM ) +1.8% in Monday's trading after Bank of America initiated coverage with a Buy rating and $50 price target, saying the company's position at the top of most of its markets is attributable to differentiated offerings and high barriers to entry.
Following Howmet's ( HWM ) separation from Arconic, "an intense focus on product quality, pricing/long-term agreements, the balance sheet and [free cash flow] unlocked meaningful shareholder value, [but] we believe there is more value to be created as the commercial aero cycle recovers from the COVID-led downturn and Boeing's own setbacks that further depressed the cycle's pace of recovery, BofA analyst Ronald Epstein said.
With the aerospace cycle still in its early days, Epstein sees room for revenue growth, margin expansion and earnings growth, forecasting EPS compound annual growth rate of ~25% during 2021-26.
While long-haul demand is still weak, Howmet's ( HWM ) short-haul demand and pricing power are "resulting in strong EBITDA growth and rapidly improving free cash flow," Leo Nelissen writes in an analysis published on Seeking Alpha .
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Howmet started as Buy at BofA as aerospace cycle recovery still in early days