Sign InHowmet trades near $170 support; modest bounce expected, valuation gap leaves Hold
Summary
On 08/15/2025 the stock closed at $171.25—trading below its 50‑day MA and near oversold levels—suggesting a likely short‑term bounce into the mid‑$170s while persistent valuation disconnect (DCF $15.54 vs. rich multiples) and mixed technical/fundamental signals justify a Hold.
Technical snapshot
- Last close (08/15/2025): $171.25 (-2.69%). Intraday range: $170.34–$176.00. Volume: 3.26 million vs. avg. 3.11 million.
- Trend & momentum: 50‑day MA $179.88 (price below), 200‑day MA $140.81 (price above). RSI(14) 30 — neutral/near‑oversold. 3‑month MACD -0.43 (bearish momentum). ATR $3.12 (daily volatility).
- Key levels: Support $170.09, Resistance $176.22. 52‑week range $90.72–$193.26.
Short-term outlook — Next trading day (08/18/2025)
- Base case: A near‑term bounce into the $172.00–$176.00 band as bargain hunters test support around $170.10 and RSI sits near oversold.
- Risk case: Continued selling pressure could break support and push toward $166.00–$168.00 on follow‑through momentum.
- Probability: Higher chance of a modest recovery/back‑test of resistance given elevated year‑to‑date gains and recent news-driven sentiment; intraday range expected ~$168.00–$176.00.
One‑week outlook
- Consolidation likely between $170.00 and the 50‑day MA at $179.88. If buyers reassert, a retest of $180–$184 is attainable; if momentum worsens, a deeper correction toward $160–$165 (near consensus target and low‑side analyst target range) is possible. Volume and MACD will determine which scenario unfolds.
Fundamental snapshot
- Market cap: $69.04 billion. EPS (TTM) $3.41; P/E 50.22 (elevated). Dividend yield 0.23% (based on TTM). Next dividend date: 08/25/2025. Next earnings: 11/05/2025.
- Analyst landscape: 17 Buys, 3 Holds, 1 Sell; consensus rating: Buy. Street targets: High $205.00, Low $118.00, Median/Consensus $161.50.
- Valuation signal: The provided DCF result is $15.54 per share (model output). That figure is materially below current market pricing, producing a wide disconnect between the DCF output and market multiples; likely reflects conservative or incomplete inputs and should be reconciled before treating as a firm intrinsic price.
Recent company‑specific news
- 08/14/2025: Stock up roughly 85% year‑over‑year; commentary highlights strong aerospace demand, defense tailwinds and shareholder‑friendly actions.
- 08/13/2025: Q2 2025 commercial aerospace sales increased ~8%, driven by engine demand and rising air travel — supports cyclical recovery thesis.
Intrinsic value & long‑term potential
- Intrinsic value: The supplied DCF ($15.54) implies the company would be deeply overvalued at current levels; however, that DCF is inconsistent with observed market behavior and analyst targets. A DCF this low likely omits significant growth or margin assumptions (commercial aerospace and defense demand, share buybacks, price/cost pass‑through). Rebuilding a DCF with explicit growth, margin and capex scenarios is required for a credible intrinsic range.
- Long term: Howmet benefits from secular drivers in commercial aerospace recovery, strengthening engine content, and defense exposure. If growth and margins continue, the company can justify premium multiples; conversely, cyclicality, raw‑material cost swings and execution risk can compress valuations. The elevated P/E (50.22) embeds robust growth expectations — success hinges on sustained top‑line and margin expansion.
Overall evaluation
- Classification: Hold.
- Rationale: Technicals show short‑term weakness (price under 50‑day MA, negative MACD) but not a structural downtrend (price well above 200‑day MA). Fundamental signals are mixed: strong operational momentum in aerospace and positive analyst sentiment, but a high P/E and a large divergence between market price and the provided DCF create valuation uncertainty. The consensus target ($161.50) sits below the current price, indicating limited near‑term upside per some street estimates. For investors prioritizing entry timing or valuation discipline, the stock merits caution until either price consolidates closer to fair‑value metrics or fundamentals clearly reaccelerate.
Key monitoring items: volume/price behavior around $170 support, MACD direction, updates on commercial aerospace orders and margins, and the company’s November earnings release.
