Hexcel (HXL) Stock Forecast & Price Target

Hexcel is expected to benefit from heightened investor confidence in the original equipment cycle, with a projected 50% increase in widebody revenues from 2026 to 2028. The company has demonstrated strong financial performance, highlighted by a 32% year-over-year increase in free cash flow to approximately $96.5 million and a 13.3% year-over-year growth in its Defense, Space & Other sales segment, which reached $182 million. Additionally, momentum from the A320 program and increased government defense spending in Europe further support an optimistic outlook for continued earnings and revenue growth, positioning Hexcel favorably for future market developments.

Hexcel's stock experienced a notable increase of 15%, despite a downward revision to its revenue and EPS outlook, primarily influenced by ongoing challenges in the aerospace supply chain impacting major clients like Airbus and Boeing. The company's commercial aerospace sales decreased 8.6% year-over-year, with operating margins declining to 11.2%, which fell short of expectations due to the effects of tariffs and inventory destocking. Furthermore, management anticipates continued pressure from destocking in the third quarter, coupled with rising interest expenses and persistent tariff impacts, leading to an overall negative outlook on the company's financial health.