By  SCOTT LEHTONEN

Defense leader Howmet Aerospace (HWM) is building a base, offering a buy point ahead of the company's first-quarter earnings report on Thursday. That makes Howmet stock Wednesday's pick for IBD 50 Growth Stocks To Watch.

Howmet Aerospace is a major supplier of jet engine components, aerospace fasteners and airframe structural components for airline and military aircraft.

Of $8.3 billion in sales last year, 53% was in commercial aerospace, 17% in defense, 15% in commercial transportation (centered on forged aluminum truck wheels) and 11% in gas turbine components.

Pittsburgh-based Howmet said commercial aerospace is benefiting from accelerating demand for new aircraft and engine parts as airlines seek more fuel-efficient planes. Sales of commercial engine parts soared 44% in 2025. Meanwhile, Howmet's defense business grew 21% last year.

First-quarter earnings are due Thursday morning. Wall Street expects Howmet to earn $1.11 per share on revenue of $2.24 billion, year-over-year increases of 29% and 15%, respectively.

And for the full year, analysts are looking for Howmet's earnings to climb 23%. They also see an increase of 20% in 2027, per IBD MarketSurge.

Howmet Stock Shows Buy Point

Meanwhile, Howmet stock is forming a cup-with-handle base with a 259.82 buy point, per IBD MarketSurge chart analysis. Howmet stock rallied more than 5% in midday trading Wednesday, set to decisively retake its 50-day moving average.

Howmet stock shows an 87 out of a best-possible 99 IBD Composite Rating, according to IBD Stock Checkup, amid underperformance since early March. Still, the base makes the defense leader one of the best stocks to watch in the current market.

With IBD's recommended equity exposure range of 80% to 100%, investors have flexibility to buy breakouts among top-rated stocks.

The stock's relative strength line hit a new high in early March, but retreated during its basing process. Currently, the RS line is rebounding from its recent lows amid rotation out of defense stocks and into artificial intelligence-linked names. Remember to keep an eye on that technical indicator.

The RS line measures a stock's price performance vs. the S&P 500, providing insight into a stock's leadership status. Howmet also has a decent 80 Relative Strength Rating but that's down from 86 four weeks ago.

Additionally, Howmet has a 21-day average true range, or ATR, of 3.19%, indicating normal daily price swings for the stock. The average true range is available on IBD's MarketSurge and gauges the characteristic breadth of a stock's behavior.

Stocks with a high ATR tend to make large price moves that can trigger sell rules. Stocks with lower ATRs tend to make more incremental moves.

Best Stocks To Watch

These three recent IBD 50 Growth Stocks To Watch picks are among the top performers:

Source: IBD Data As Of May 6

Follow Scott Lehtonen on X at @IBD_SLehtonen for more on the best stocks to buy and watch and the stock market.

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Source: Investor's Business Daily