Howmet Aerospace (HWM) bounced back Tuesday, climbing 3.5% in morning trading after Citi and Bernstein both argued that Monday’s sharp drop was a buying opportunity rather than a sign of lasting damage.
HWM closed Monday at $244.95, down about 7.5% after Elon Musk revealed that SpaceX plans to manufacture its own gas turbine blades and vanes at a new facility in Bastrop, Texas. The move spooked investors who have watched Howmet’s gas-turbine revenue grow 39% in Q1 after a 25% rise in 2025.
The SpaceX project is tied to a planned 20-gigawatt power installation for AI data centers, targeted for completion by end of 2027. Musk said casting turbine components in-house could cut gas turbine deployment time by as much as 18 months, which he flagged as a major production bottleneck.
Citi analyst John Godyn said the opposite conclusion should be drawn. He wrote that SpaceX’s decision actually “reinforces the critical nature of HWM parts” and highlights the strength of demand rather than a threat to Howmet’s position.
Citi set a $329 price target, implying about 34% upside from Monday’s close. The bank forecasts HWM earnings of $5.37 per share in 2026, $6.76 in 2027, and $8.08 in 2028, with the 2027 and 2028 estimates sitting above Wall Street consensus.
Bernstein analyst Douglas Harned raised his price target to $328 from $248 while keeping an Outperform rating. He argued SpaceX’s move is driven more by tight industry supply and a desire for control than any dissatisfaction with existing suppliers.
Bernstein also questioned whether SpaceX could realistically hit volume production within Musk’s 18-month window. Casting turbine blades capable of handling extreme heat and stress requires specialized equipment, technical expertise, and complex coatings, making it hard to scale quickly.
Howmet’s contracted revenue stream also provides a buffer. The company holds long-term supply agreements with every major industrial gas turbine producer through 2030, covering a period that overlaps with when SpaceX hopes to come online.
Howmet is not standing still either. New turbine blade capacity came online in Q2, with at least six more expansions expected by end of Q4. Combined, those projects could lift capacity by as much as 38% from Q1 2025 levels.
Both banks noted that SpaceX’s likely output would be directed toward its own power needs rather than competing broadly in the market. Bernstein said SpaceX would probably remain a customer in the broader supply chain regardless.
Of the 24 analysts covering HWM, 20 rate it a Buy or Strong Buy. The stock is still trading roughly 18% below its 52-week high of $310.
The broader market did not help the bounce. The S&P 500 fell 0.6% and the Nasdaq dropped 1.0% in morning trading, pressured by rising Treasury yields and crude oil above $92 a barrel.
Citi flagged upcoming investor conferences as a potential catalyst, where Howmet is expected to give more detail on capacity additions and customer commitments.
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