Howmet Aerospace Wins a KeyBanc Upgrade as Cramer Backs the Dip

Jim Cramer used CNBC's "Mad Money Lightning Round" to tell viewers to buy Howmet Aerospace, and his reasoning was simple: the shares have fallen hard while the business has kept performing. That call landed the same day KeyBanc lifted its rating on the aerospace and industrial-gasturbine supplier to "Overweight" from "Sector Weight," putting a 237 US-dollar price target on the stock.

The two endorsements rest on the same foundation — a third-quarter report that cleared Wall Street's bar on both the top and bottom lines. Revenue for the quarter came in at 2.7 billion US dollars, ahead of the 2.59 billion US dollars analysts had modeled and up 29% from a year earlier. Adjusted earnings per share reached 1.46 US dollars against a consensus of 1.37 US dollars.

Profitability improved alongside the sales beat. The adjusted EBITDA margin stood at 32.5%, a gain of 310 basis points year over year, giving the more bullish camp a second leg to stand on beyond sheer revenue growth.

Two Engines, Not One

What separates Howmet's story from a pure commercial-aerospace play is the second growth engine humming beside it. Industrial gas turbines are delivering outsized momentum, with revenue in that segment jumping 45% from the prior-year period. KeyBanc's upgrade cites dynamism in both civil aviation and industrial gas turbines, and the bank raised its estimates for fiscal 2026 and 2027 rather than merely re-rating the shares.

Management's own guidance points the same direction. For 2026, Howmet lifted its revenue forecast to 10.3 billion US dollars, with a band of 10 million US dollars on either side. Looking further out, the company has put roughly 11.5 billion US dollars of revenue in view for 2027 — growth of about 12%.

Capacity That Sells Itself — at a Cost

Demand is not the constraint. According to BTIG, the new capacity Howmet is bringing online is already sold out by the time it starts up. Seven new plants are planned, with three more under consideration.

Building all of that takes capital. Management expects heavier investment next year and a persistently elevated spending level through 2028. The expansion is what converts today's order book into tomorrow's revenue, but it raises the capital outlay first — a trade-off investors will have to weigh against the growth it underwrites.

Price Targets Point in Different Directions

Not every analyst is rowing the same way. Jefferies cut its target to 350 US dollars from 370, a reduction that still leaves its mark above KeyBanc's freshly set 237 US dollars. A downgrade in the number and an upgrade in the rating are not contradictory — the two firms are adjusting from different starting points, and the distinction between the direction of a revision and its absolute level matters for anyone reading the tape.

KeyBanc's case also leans on relative valuation, which the bank finds more attractive after the stock's slide in recent months. Cramer's pitch echoes that logic.

Still, a cheaper multiple and a strong order book do not by themselves settle the investment case. Howmet has to turn surging demand into additional output, and the bill for that buildout arrives before the payoff. The next scheduled checkpoint is the quarterly report expected in February 2027.