Should you buy Howmet Aerospace at current levels?
Howmet Aerospace Inc. (NYSE: HWM) recently revealed stellar performance numbers for the first quarter of 2024. The company’s earnings report for Q1 2024, released on May 2, 2024, exceeded market expectations across key metrics, propelling its stock to new all-time highs.
With a robust revenue of $1.82 billion, representing a remarkable 14% increase year over year, the company reported earnings per share (EPS) of $0.57, surpassing estimates by $0.05.
The surge in revenue was primarily fueled by a buoyant performance in the commercial aerospace sector, which witnessed a remarkable 23% growth.
Notably, the company’s net income soared to $243 million in Q1 2024, compared to $148 million in the corresponding period of the previous year. Operating income margin also witnessed a notable uptick, reaching 20.2%.
Against the backdrop of these stellar financial results, Howmet revised its full-year 2024 guidance upwards, reflecting an optimistic outlook for future growth prospects.
Despite challenges associated with the Boeing 737 MAX program, including slower production rates, the company remains resilient and anticipates sustained momentum across its diversified end markets.
Now, let’s delve into the charts to gain deeper insights into Howmet Aerospace’s stock performance and assess its potential trajectory in the wake of these impressive earnings results.
Long-term bullish trend remains intact
Howmet’s stock has been on a long-term uptrend since the post-COVID crisis rally. After crashing to sub-$10 levels during the market plunge in early 2020, the stock has soared to its current $80 level almost non-stop.
It remained range-bound for some period between May 2021 and October 2022, but soon had a breakout and marched upward. Since October 2023 it has seen strong upward momentum that has taken it from sub $45 levels to currently near $80.
Because the move has been sharp and sudden, Howmet’s major support on long-term charts lies near $48. As long as it doesn’t go below that level or breaks its long-term bullish trendline, investors can continue holding the stock.
Short-term gap-up levels should hold
On the short-term hourly charts, the stock looks extremely strong right now. All momentum indicators are currently in the strong positive zone. At this juncture, shorting the stock is strongly not advised.
Traders who want to take a long trade can consider opening a position at the current level with a profit target near $88. However, the immediate stop loss for this trade is $73.8 and if the stock falls below the gap-up opening it made on Friday, they should sell their positions because then it can fall to near $65 levels swiftly.
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