Wells Fargo analyst Matthew Akers has revised the price target for Hexcel Corporation (HXL, Financial), reducing it from $55 to $53. Despite this adjustment, the analyst maintains an Equal Weight rating on Hexcel's shares. This decision comes in the wake of slower-than-expected progress in commercial aircraft production programs, which have prompted the firm to lower its estimates following the first quarter. The adjustment reflects the ongoing challenges in the aerospace sector as the company navigates these production delays.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 16 analysts, the average target price for Hexcel Corp (HXL, Financial) is $59.15 with a high estimate of $81.00 and a low estimate of $50.00. The average target implies an upside of 19.48% from the current price of $49.50. More detailed estimate data can be found on the Hexcel Corp (HXL) Forecast page.
Based on the consensus recommendation from 20 brokerage firms, Hexcel Corp's (HXL, Financial) average brokerage recommendation is currently 2.9, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Hexcel Corp (HXL, Financial) in one year is $85.09, suggesting a upside of 71.9% from the current price of $49.5. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Hexcel Corp (HXL) Summary page.
HXL Key Business Developments
Release Date: April 22, 2025
- Sales: $457 million in Q1 2025.
- Adjusted Diluted EPS: $0.37 for Q1 2025.
- Commercial Aerospace Sales: $280.1 million, down 6.3% on a constant currency basis from Q1 2024.
- Defense, Space, and Other Sales: $176.4 million, up 2.7% in constant currency from Q1 2024.
- Gross Margin: 22.4% in Q1 2025, down from 25% in Q1 2024.
- Adjusted Operating Income: $45.3 million or 9.9% of sales, compared to $54.1 million or 11.5% of sales in Q1 2024.
- Free Cash Flow: Negative $54.6 million in Q1 2025, compared to negative $35.7 million in Q1 2024.
- Adjusted EBITDA: $84.8 million in Q1 2025, compared to $98.2 million in Q1 2024.
- Share Repurchase: $50 million used to repurchase shares in Q1 2025.
- Capital Expenditures: $17.1 million in Q1 2025, compared to $18.6 million in Q1 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Hexcel Corp (HXL, Financial) has a strong value proposition with a broad range of innovative aerospace composites and robust intellectual property.
- The company is well-positioned with sole source life of program contracts across many commercial aircraft programs, benefiting from production increases by Airbus and Boeing.
- Hexcel Corp (HXL) has significant opportunities in the defense sector as US and European governments increase spending.
- The company has a solid balance sheet and a compelling multi-year cash generation profile, supported by conservative financial policies.
- Hexcel Corp (HXL) received recognition from Embraer as the Best Supplier of the Year in the materials category, highlighting its strong customer relationships.
Negative Points
- Commercial aerospace sales in Q1 2025 were down 6.3% on a constant currency basis compared to the same period in 2024, primarily due to lower sales of Boeing 787 and 737 MAX.
- Gross margin decreased to 22.4% from 25% in the same period last year, impacted by lower operating leverage and a power outage at the Decatur, Alabama facility.
- Hexcel Corp (HXL) revised its 2025 guidance downward due to lower-than-expected production rates for the Airbus A350 and A320.
- The company faces ongoing supply chain disruptions, affecting production rate increases for commercial aircraft.
- Hexcel Corp (HXL) anticipates a direct impact of $3 million to $4 million per quarter from tariffs, with uncertainty around the indirect impact on the aerospace supply chain.
