TLDR
- Bernstein says SpaceX’s plan to make its own turbine blades poses little threat to Howmet Aerospace (HWM)
- Howmet controls over 50% of the industrial gas turbine blade castings market
- Long-term supply agreements with all major turbine producers run to around 2030
- HWM reported Q2 EPS of $1.33 and revenue of $2.55 billion, both beating estimates
- Bernstein carries an Outperform rating with a $328 price target on HWM
Howmet Aerospace stock dipped after Elon Musk announced SpaceX plans to manufacture its own industrial gas turbine blades and vanes. But analysts at Bernstein are calling it a buying opportunity, not a warning sign.
HWM opened at $259.61 on Friday, well below Bernstein’s $328 price target, which implies around 24% upside from the August 28 closing price of $264.85.
SpaceX wants to install 20 gigawatts of behind-the-meter power capacity by end of 2027 for AI data centers in Bastrop, Texas. To do that, it plans to bring turbine blade production in-house.
Musk has previously pointed to supplier concentration as a bottleneck for the industry. Howmet is that bottleneck. It holds more than 50% of the industrial gas turbine blade castings market.
But Bernstein analysts argue that SpaceX moving to self-supply says more about how tight the market is than about any weakness in Howmet’s position.
Howmet has long-term supply agreements with every major industrial gas turbine producer. Those deals are believed to run to around 2030, consistent with Musk’s own comments that turbine blades are effectively sold out through that period.
SpaceX’s manufacturing push is also expected to focus on meeting its own internal needs, not competing with Howmet across the wider market.
There are real technical hurdles too. Producing turbine blades at scale is not straightforward, and SpaceX may struggle to hit volume production within the 18-month window it needs.
Strong Fundamentals Back the Bull Case
Howmet’s first new capacity expansion came online in Q2, with at least six more expansion efforts in the pipeline. Its industrial gas turbine business grew 38% during the quarter.
The company reported Q2 EPS of $1.33, beating the $1.24 consensus estimate. Revenue came in at $2.55 billion against analyst expectations of $2.43 billion, up 24.1% year over year.
Howmet set Q3 2026 EPS guidance of $1.34 to $1.36 and full-year 2026 guidance of $5.23 to $5.31.
Analyst Ratings and Institutional Interest
Wall Street is mostly bullish. The consensus rating is Moderate Buy, with an average price target of $316.22. JPMorgan lifted its target to $350, Morgan Stanley sits at $335, and Susquehanna raised its target to $340.
Institutional investors own 90.46% of the company. NEOS Investment Management increased its stake by 13.1% in Q2, bringing its holdings to a value of approximately $17.44 million.
Howmet also raised its quarterly dividend from $0.12 to $0.14 per share, paid August 25. The annualized dividend stands at $0.56, a yield of 0.2%.
The stock’s 52-week range sits between $173.38 and $310.00, with a 50-day moving average of $275.44.
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