Home / Business and Economy / Bernstein Reassures HWM Investors Amidst SpaceX News
Bernstein Reassures HWM Investors Amidst SpaceX News
1 Sep
Summary
- SpaceX's turbine component production plan caused Howmet's stock to drop.
- Bernstein suggests tight industry capacity, not a core business threat.
- Howmet's customer agreements extend through 2030.
Howmet Aerospace (HWM) experienced a stock decline of up to 9% following SpaceX's announcement of its intent to manufacture turbine blades and vanes for a substantial power project in Bastrop, Texas. This development, aimed at supporting AI data centers, initially raised investor concerns.
However, Bernstein analyst Douglas Harned provided a reassuring perspective, interpreting SpaceX's move as a reflection of tight capacity within the industrial gas turbine sector. This market is currently experiencing demand that outpaces available manufacturing capabilities.
Howmet is actively addressing this demand by expanding its output. The company has six additional projects slated for completion by the end of the fourth quarter, which are anticipated to increase turbine-blade capacity by as much as 38% from early 2025 levels.
Furthermore, Bernstein highlighted that Howmet's existing customer agreements are in place through 2030. The firm maintained its 'Outperform' rating and increased its price target for HWM to $328 from $248, indicating confidence in the company's long-term prospects.
