What Happened?
Shares of aerospace and defense company Howmet (NYSE: HWM) fell 10.2% in the afternoon session after the company reported record-breaking second-quarter financial results that were overshadowed by a decline in its Forged Wheels business segment. The company posted record second-quarter revenue of $2.05 billion and a 36% jump in adjusted earnings per share, and also lifted its full-year financial outlook. However, investors appeared to focus on a weak spot in the report. Howmet's Forged Wheels segment, which serves commercial transportation, experienced a 1% revenue dip. The company connected this to a broader 4% decline in the commercial transportation market. This specific weakness, combined with the stock's nearly 76% rally year-to-date, likely prompted investors to take profits despite the strong headline numbers.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Howmet? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Howmet’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. Moves this big are rare for Howmet and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock dropped 8.6% on the news that President Trump announced "reciprocal tariffs" on all US imports, set at a minimum rate of 10% or more.
Markets reacted negatively to the announcement, reflecting deep concerns among investors about the broader economic implications. The tariffs were likely seen as a significant threat to global trade flows, with the potential to slow economic growth, drive up consumer prices, and spark retaliatory measures. Wedbush analyst Dan Ives captured the prevailing market anxiety, stating, "We would characterize this slate of tariffs as 'worse than the worst case scenario' the Street was fearing." His comment highlighted how the scope and severity of the tariffs far exceeded Wall Street's expectations, adding a new layer of uncertainty for businesses and investors.
Howmet is up 58.8% since the beginning of the year, and at $175.89 per share, it is trading close to its 52-week high of $192.14 from July 2025. Investors who bought $1,000 worth of Howmet’s shares 5 years ago would now be looking at an investment worth $11,901.
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