BUZZ-Howmet falls after GE Aerospace agrees to buy CPP for $11.75 billion

HWM stock may come under pressure near term given GE's move to vertically integrate via a HWM competitor, even though HWM's financials are unlikely to see any negative impact from the GE/CPP combo in the next five years, TD Cowen said.

CPP accounts for about 25% of GE's airfoil demand today and will remain at that level by 2030, aimed to be complementary and not a replacement of other blade and vane suppliers, Jefferies said.

The median price target of 24 brokerages covering GE is $400, while the median price target of 23 brokerages covering HWM is $335, according to data compiled by LSEG.

Year to date as of the last close, GE is up 5% and HWM is up 22%.

Shares of aircraft parts maker Howmet Aerospace fell 7% to $241 after engine maker GE Aerospace agreed to buy Howmet rival Consolidated Precision Products.

GE said it will buy CPP from investment firms Warburg Pincus and Berkshire Partners for $11.75 billion.

The deal could help GE gain greater control over a key source of precision castings used in jet engines and comes a few days after Elon Musk touted SpaceX's ambition to start in-house casting of gas turbine blades and vanes.

GE shares were up marginally in morning trade.