Howmet Aerospace Inc. saw its stock climb 3.3% on Tuesday, a move analysts described as a market reaction that could present a buying opportunity.
Bernstein SocGen Group analyst Douglas Harned left an Outperform rating in place and retained a $328.00 price target on the company. Harned was responding to SpaceX’s announcement that it plans to build its own blades and vanes for industrial gas turbines as part of an effort to install 20GW of behind-the-meter capacity by the end of 2027 for terrestrial AI data centers in Bastrop, Texas.
"Assuming SpaceX does the buildout to produce blades, we would not expect the company to become a new industry supplier of forgings and castings, which would have little connection with core SpaceX objectives. Instead, we expect this to be all about vertical integration, as it is doing in other areas (e.g., solar panels)," Harned commented. "We also are skeptical that SpaceX would be able to have volume production in time to meet its power expansion goals in 18 months. This is not easy, which is why Howmet has been able to maintain its lead position."
Harned elaborated that SpaceX’s internal build effort, if it proceeds, will most likely be focused on meeting the company’s own demand rather than establishing a high-volume, cost-competitive facility for the wider market. He framed the market’s negative response to SpaceX’s comments as an opportunity to accumulate shares.
"In the end, that Howmet’s stock is down on the SpaceX comments should be a buying opportunity," Harned commented.
Separately, Citi analyst John Godyn reiterated a Buy rating and a $329.00 price target on Howmet Aerospace. Godyn also placed the stock on a 30-Day Upside catalyst watch, signaling an expectation of near-term positive developments that could drive further gains.
The analysts’ notes emphasize two central dynamics: first, that the SpaceX initiative may reflect vertical-integration motives rather than an intention to enter the broader commercial supply chain for forgings and castings; and second, that the technical and scale challenges of achieving volume production within an 18-month horizon could limit any near-term competitive pressure on established producers such as Howmet.
Market participants responded to those analyst assessments by bidding the shares higher on Tuesday, reflecting investor appetite for exposure to an aerospace and industrial castings leader amid debate over potential new entrants pursuing internal supply solutions.
Summary
Howmet shares rose 3.3% on Tuesday after analysts from Bernstein SocGen Group and Citi held constructive ratings and high price targets, arguing that SpaceX’s plan to build blades and vanes for gas turbines is more likely vertical integration for internal needs and unlikely to quickly displace established suppliers.
- Key points
- Howmet’s stock gained 3.3% on Tuesday following analyst commentary supporting a buying case.
- Bernstein SocGen Group’s Douglas Harned kept an Outperform rating and $328.00 price target, highlighting skepticism that SpaceX will be able to scale volume production in time to meet its 18-month power expansion goals.
- Citi’s John Godyn reiterated a Buy rating with a $329.00 price target and opened a 30-Day Upside catalyst watch on the stock.
- Sectors impacted
- Aerospace manufacturing and industrial castings
- Power generation and data center infrastructure
- Risks and uncertainties
- SpaceX’s ability to achieve volume production within 18 months is uncertain and may not meet its power expansion timeline - this affects industrial manufacturing and power infrastructure sectors.
- Even if SpaceX develops in-house capability, its focus could remain on serving internal demand rather than competing as a commercial supplier, leaving market shares and pricing dynamics in the industry unchanged.
- Short-term market sentiment shifts tied to announcements about vertical integration can cause stock volatility in aerospace and industrial supply chains.