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    HWM · NYQ · Industrials

    Howmet Aerospace Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 67.85

    Market price

    USD 212.99

    Implied upside

    -68.1%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Current EV/EBITDA of 36.1x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 67.85-68.1%
    Exit multiple
    USD 130.58-38.7%
    Market price
    USD 212.99

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn3bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 10.3bnUSD 11.7bnUSD 13.1bnUSD 14.5bnUSD 15.9bnUSD 17.1bnUSD 18.3bnUSD 19.2bnUSD 20.0bnUSD 20.5bn+7.9%
    EBITUSD 2.2bnUSD 2.4bnUSD 2.7bnUSD 3.0bnUSD 3.3bnUSD 3.6bnUSD 3.8bnUSD 4.0bnUSD 4.2bnUSD 4.3bn+7.9%
    NOPATUSD 1.7bnUSD 2.0bnUSD 2.2bnUSD 2.4bnUSD 2.7bnUSD 2.9bnUSD 3.1bnUSD 3.2bnUSD 3.4bnUSD 3.4bn+7.9%
    Add depreciation & amortisationUSD 410.4mUSD 465.8mUSD 522.2mUSD 578.2mUSD 632.4mUSD 683.0mUSD 728.2mUSD 766.4mUSD 796.1mUSD 816.0m+7.9%
    Less capital expenditureUSD -425.4mUSD -517.5mUSD -619.2mUSD -728.8mUSD -844.3mUSD -962.7mUSD -1.1bnUSD -1.2bnUSD -1.3bnUSD -1.4bn+14.1%
    Capex, % of revenue4.1%4.4%4.7%5.0%5.3%5.6%5.9%6.2%6.5%6.8%-
    Less increase in working capitalUSD -439.8mUSD -297.9mUSD -303.7mUSD -301.9mUSD -291.5mUSD -272.1mUSD -243.4mUSD -205.6mUSD -159.8mUSD -107.1m-14.5%
    Free cashflow to firmUSD 1.3bnUSD 1.6bnUSD 1.8bnUSD 2.0bnUSD 2.2bnUSD 2.3bnUSD 2.5bnUSD 2.6bnUSD 2.7bnUSD 2.8bn+8.9%
    Discount factor0.95450.86970.79250.72200.65790.59940.54620.49770.45340.4132-
    Present valueUSD 1.2bnUSD 1.4bnUSD 1.4bnUSD 1.4bnUSD 1.4bnUSD 1.4bnUSD 1.4bnUSD 1.3bnUSD 1.2bnUSD 1.1bn-
    Present Value Of The ForecastUSD 13.3bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.198Reported 1.295, pulled toward 1.0 (Blume)
    Cost of equity9.96%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 14.1x interest cover. Book interest / average debt was lower, at 4.5%.
    Market capitalisationUSD 84.7bn96.3% of capital
    Total debtUSD 3.2bn3.7% of capital, book value as a proxy
    Tax rate19.8%Effective, capped at statutory
    WACC9.75%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 67.85

    56% of EV

    Forecast FCFF, final year
    USD 2.8bn
    Capex at depreciation, working capital in reinvestment
    USD 3.4bn
    Less reinvestment at g/ROIC (16.8% of NOPAT)
    USD -577.8m
    Capitalised
    USD 2.9bn
    ROIC (reported)
    14.9%
    Terminal value, undiscounted
    USD 40.5bn
    Terminal value, discounted
    USD 16.7bn
    Enterprise value
    USD 30.0bn
    Less net debt
    USD 2.5bn
    Equity value
    USD 27.5bn

    Exit at 20.0x EBITDA

    Value per shareUSD 130.58

    76% of EV

    Terminal value, undiscounted
    USD 102.1bn
    Terminal value, discounted
    USD 42.2bn
    Enterprise value
    USD 55.5bn
    Less net debt
    USD 2.5bn
    Equity value
    USD 53.0bn

    Spread between methods: 63%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.75%92.1994.5797.52101.22105.94
    8.75%77.6778.8480.2982.0984.35
    9.75%66.7467.2267.8568.6669.68
    10.75%58.2158.3058.4758.7259.08
    11.75%51.3951.2451.1351.0751.06

    Outlined: this model. Green text: above today's price of 212.99. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year13.4%9.5%24.3%
    EBIT margin25.8%20.9%59.6%
    Discount rate-9.8%5.0%
    Download as Excel

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    Yahoo Finance and RBA data. General information, not advice. Methodology.