Howmet Aerospace Rides 32% Gas Turbine Growth, Beats Q4 EPS with $1.05
Howmet Aerospace shares have surged 24.58% YTD and 109.22% over the past year, driven by a Q4 2025 EPS beat of $1.05 versus $0.965 and 14.7% revenue growth, with gas turbine revenue up 32%. The company reported $1.43B free cash flow (+46.5%), a $1.8B acquisition, and a 20% dividend hike.
1. Q4 2025 Earnings Beat
Howmet Aerospace reported Q4 2025 EPS of $1.05, surpassing expectations of $0.965, while revenue rose 14.7% year-over-year. The Engine Products segment delivered a 32% increase in gas turbine revenue, highlighting strong demand for precision-engineered components in power generation.
2. AI Data Center Demand Driving Sales
Gas turbine components have become critical for hyperscale data centers powering AI workloads, positioning Howmet at the heart of the infrastructure buildout. CEO John Plant emphasized that elevated demand for electricity generation is fueling the largest growth phase for the gas turbines business in years.
3. Financial Strength and Capital Deployment
The company generated $1.43 billion in free cash flow, up 46.5% from the prior year, enabling a $1.8 billion acquisition of Consolidated Aerospace Manufacturing. Howmet also increased its dividend by 20% to $0.12 per share for Q1 2026, reflecting confidence in its cash flow trajectory.
4. Analyst Ratings and Valuation
Truist and Citigroup raised price targets to $258 and $255 respectively, supporting a Moderate Buy consensus with an average 12-month target of $252.95. Despite a premium P/E ratio of 55x–68x, bullish ratings underscore optimism on continued growth from aerospace and gas turbine segments.