Howmet Aerospace (HWM) Jefferies Global Industrials Conference 2026 summary

Market trends and demand evolution

• Data center demand is shifting from standard silicon to advanced, custom silicon, driving variable power needs and influencing turbine technology choices.

• Turbine manufacturers face unprecedented demand, especially for data centers and energy infrastructure, leading to multi-year supply agreements with major OEMs through the end of the decade and beyond.

• Capacity constraints are a key challenge, with ongoing and planned expansions in manufacturing footprint and capital deployment to meet rising demand.

• Spares demand is rising due to harder-working fleets and increased variability in power requirements, with aftermarket growth expected into the 2030s.

• Defense portfolio is expanding, anchored by programs like the F-35 and growing missile and drone demand, with expectations for continued double-digit growth.

Technology and product innovation

• Technological evolution in turbine blades is progressing from equiaxed to directionally solidified and single crystal, with increasing sophistication and manufacturing complexity.

• New product introductions are at record levels, with significant advancements in both commercial and defense aerospace, including collaborative combat aircraft and cruise missiles.

• The company is commissioning the world's largest casting furnaces to support larger and more advanced turbine blades, anticipating future requirements.

• Yield improvements and transition to serial production are driving a 30%+ increase in output, helping address capacity bottlenecks.

• IP protection is prioritized through cybersecurity, physical process segmentation, and selective patenting to maintain competitive advantage.

Strategic outlook and capital allocation

• Multi-year, often exclusive contracts with major turbine and aerospace OEMs secure market share and revenue visibility through the 2030s.

• CapEx has doubled since 2023 to support revenue growth, with major expansions in Japan, Europe, and the U.S. underway.

• M&A remains a consideration for capital deployment, but organic growth and capacity investment are prioritized; no major deals are anticipated in the near term.

• The company is generating sufficient cash to fund buybacks, dividends, acquisitions, and expansion, maintaining leverage at 1.2x.

• Leadership emphasizes technological and supply leadership, aiming to sustain differentiation and operational excellence.