Cramer Says Wait for a Cheaper Entry Point on Howmet Aerospace

Jim Cramer has told investors to wait for a cheaper entry point on Howmet Aerospace (NYSE:HWM). During the September 10 episode of Mad Money, a caller asked whether the company’s recent vertical integration and market selloffs had weakened its competitive edge, or if demand remained strong enough to justify the pullback. Cramer replied that he thinks the stock is overpriced at current levels and expects it to head lower.

Cramer’s argument centers on how the company earns its money. He described Howmet as a fastener company whose business is mostly commodity-oriented, even though the company sells at 44 times earnings. “We don’t want to pay that for commodities even though the business is strong.” His conclusion: “I think people are saying, ‘Wait a second, that’s too much to pay, and I’m going to wait till it goes lower.'” He added that the chart “does seem like it is going lower.”

The Sole-Source Position

Howmet Aerospace is not just another industrial supplier. The company occupies a primary-supplier role across critical narrowbody and widebody aircraft programs, providing single-crystal turbine blades, advanced structural castings, and titanium fasteners. Approval and qualification requirements, manufacturing complexity, and a limited supplier base make alternative sources difficult to establish quickly.

That gives the company strong pricing power on both new plane parts and higher-margin replacement spares. The business model is built on being the only supplier or the main supplier for major programs.

Second Quarter Numbers

The company’s most recent quarterly report shows strong growth across multiple divisions. Revenue surged over 24% year-over-year (21% organically) to $2.55 billion. The drivers were a 28% jump in commercial aerospace revenue, a 38% expansion in industrial gas turbines, and an 11% gain in defense aerospace.

The core Engine Products division recorded third-party sales of $1.37 billion, up 32% year-over-year. Segment adjusted EBITDA margins expanded by 470 basis points to 37.7%.

What Cramer Warns Against

Cramer’s warning is about valuation. He sees Howmet as a commodity-like business trading at a high multiple, and he thinks the market is discounting that reality. His advice is simple: wait for a lower price.

His concern is not that the business is failing. At 44 times earnings, he believes investors are paying for a commodity that does not justify that premium.

Valuation Risks

Howmet Aerospace carries valuation risks that advise a cautious approach. The stock trades at elevated EV/EBITDA and forward P/E multiples relative to traditional industrial peers. That leaves little margin for operational missteps.

The company’s capital expenditure plans are part of the problem. Capital expenditures are projected to exceed $500 million in 2026 as the company builds out production capacity for next-generation engine components and gas turbines. That spending reduces near-term free cash conversion flexibility.

Operational Risks

Operational risks remain tied to commercial aircraft build rates. Continued assembly line bottlenecks, quality control freezes, and delivery delays at key original equipment manufacturers present persistent risks to original-equipment volume forecasts. Boeing is named specifically as the most notable example of these risks.

Working capital requirements expanded in Q2 2026. Inventories rose to $2.183 billion to accommodate production ramps. That exposes the company to inventory holding costs if OEM build-rate targets stall.

The Bottom Line From Cramer

Cramer’s message is straightforward: the stock is expensive, the business is commodity-oriented, and the chart suggests it will fall. His advice is to sit tight and wait for a better entry point.

There is no contradiction between the strong quarterly numbers and Cramer’s bearish call. The company is growing, margins are expanding, and the underlying demand is solid. But the valuation is the issue, and Cramer believes the market has priced the stock as if the company is something it is not.

Quick Summary

Here is what matters from the call:

• Cramer says the stock is overpriced at 44 times earnings
• He believes the chart suggests the stock will fall further
• Howmet’s business is commodity-oriented despite strong demand
• The company is expanding production capacity with $500 million in projected 2026 capital spending
• Inventories rose to $2.183 billion in Q2 2026

What To Watch Next

The question now is whether Howmet can keep delivering on the numbers while the stock works through its valuation discount. The company has shown execution strength in the past quarter, but the operational risks and capital commitments mean the path is not entirely clear.

Cramer’s call is a reminder that even a growing company can be overvalued at a given moment. Investors who heed his advice are betting that the market eventually sees the stock as he does.

For those who own the stock, the watchword is patience. For those considering a purchase, the signal is to wait for a lower price before committing.

The key facts are easy to lay out. Howmet is a NYSE-listed industrial company trading at 44 times earnings, with a primary-supplier position across narrowbody and widebody aircraft. Its Q2 revenue grew over 24% year-over-year to $2.55 billion, and its Engine Products division posted $1.37 billion in third-party sales up 32%.Margins expanded 470 basis points to 37.7%. Yet the stock’s valuation multiples are elevated compared to traditional peers, and Cramer’s call reflects that tension directly.

Cramer · Howmet Aerospace · HWM · stock analysis · valuation risk