Hexcel (HXL) Stock Forecast & Price Target

Hexcel is projected to experience significant growth, with a notable ~50% increase in widebody revenue anticipated over the 2026-2028 period, driven by increased investor confidence in the original equipment cycle. The company reported a strong year-over-year sales growth of 13.3% in its Defense, Space & Other segment, reaching $182 million, and achieved a free cash flow of approximately $96.5 million, reflecting a 32% increase year-over-year. Furthermore, the upcoming enhancements in the A320 program and increased defense spending in Europe contribute to a positive outlook for Hexcel, positioning the company well amid stabilizing supply chains and expected higher production rates.

Hexcel's stock has experienced short-term gains despite a downward revision in revenue and earnings per share (EPS) forecasts, mainly attributed to a decline in Commercial Aerospace sales, which fell 8.6% year-over-year, highlighting the impact of broad aerospace supply chain challenges. The company's gross margins and operating leverage have decreased due to tariffs and reduced finished goods inventory, contributing to a drop in operating margins to 11.2%, which is below expectations and down 260 basis points year-over-year. Lastly, ongoing destocking pressures and increased interest expenses have led to a negative EPS outlook, with management anticipating further declines in the third quarter before a potential recovery in the fourth quarter due to improved production rates.