What are the top risks for Howmet Aerospace Inc. (HWM)?

The top risks identified in the 10-K filing are: Supply Chain Disruptions and Raw Material Volatility, Customer Concentration and Cyclical Market Dependence, Cybersecurity Threats and AI Misuse. Howmet faces significant risks primarily related to supply chain vulnerabilities for critical raw materials, customer concentration in cyclical aerospace markets, and escalating cybersecurity threats including AI misuse. These factors, compounded by geopolitical instability and evolving trade policies, present substantial challenges to operational stability and profitability.

HWM - Comprehensive Filing Intelligence

FY 2025•10-K•Filed Feb 12, 2026

6.0/10

Filing Health:GOOD

Solid fundamentals with minor concerns to monitor

Executive Summary

Overall revenue and profitability increased significantly in 2025, driven by strong performance in the aerospace (commercial and defense) and gas turbines markets.. Margin improvements were achieved through favorable pricing, productivity gains, and cost pass-throughs, despite some headwinds from increased headcount and lower commercial transportation volumes.. The company has a significant guarantee obligation for Alcoa Corporation, with an estimated present value of $1,141 million, though the risk of default is considered remote.. Overall sales increased by 11% in 2025 compared to 2024.

Top Concerns

!Margin improvements were achieved through favorable pricing, productivity gains, and cost pass-throughs, despite some headwinds from increased headcount and lower commercial transportation volumes.
!Reclassification of prior period financial statements
!Potential delays in tariff cost recovery impacting margins
!The company has a significant guarantee obligation for Alcoa Corporation, with an estimated present value of $1,141 million, though the risk of default is considered remote.
!Letters of credit and surety bonds totaling $76 million and $44 million respectively are outstanding, primarily related to workers' compensation, environmental, tax, and insurance obligations.

Top Positives

+Overall revenue and profitability increased significantly in 2025, driven by strong performance in the aerospace (commercial and defense) and gas turbines markets.
+Margin improvements were achieved through favorable pricing, productivity gains, and cost pass-throughs, despite some headwinds from increased headcount and lower commercial transportation volumes.
+Cash flow generation remains strong, enabling significant investments in capacity expansions to support future market growth, particularly in the aerospace sector.

Analysis Dimensions

Our 5-pass AI analysis examines this filing across multiple dimensions. Each dimension score is derived from direct analysis of SEC filing text.

Narrative Intelligence

7.0/10

Management tone is confidently optimistic with focus on higher volumes.

Full analysis includes: tone changes vs prior quarter, margin driver breakdown, forward guidance analysis, strategic priorities.

Accounting Quality

7.0/10

Earnings quality shows moderate accounting practices.

Full analysis includes: reserve and allowance changes, non-recurring item analysis, stock-based compensation impact, disclosure concerns.

Hidden Liabilities

Off-balance sheet risk is low with $1,141M in identified exposure.

Full analysis includes: cloud and purchase commitments, VIE/SPE exposure, covenant compliance status, refinancing risk assessment.

Risk Landscape

3.0/10

Overall risk profile shows supply chain disruptions and raw material volatility as primary concern.

Full analysis includes: 8 risk categories with severity, new vs escalated risks, management response assessment, risk trend analysis.

Segment Performance

7.0/10

Segment health analysis shows Engineered Structures as strongest performer while Forged Wheels lags.

Full analysis includes: segment-by-segment revenue breakdown, geographic concentration risk, customer concentration analysis, segment margin trends.