Analyst Gautam Khanna of TD Cowen maintained a Hold rating on Hexcel (HXL – Research Report), reducing the price target to $60.00.
Gautam Khanna has given his Hold rating due to a combination of factors impacting Hexcel’s growth outlook. One significant concern is the excessive inventory levels for the A350 and 787 models, which pose a risk to Hexcel’s projected growth in 2026. The production rate constraints for these models, exacerbated by supply chain bottlenecks and production delays, suggest that the anticipated growth may not meet consensus expectations. This has led to a revised price target of $60, reflecting a more cautious outlook.
Additionally, Khanna believes that the consensus earnings per share (EPS) estimates for 2026 are overly optimistic, with expectations of 10% sales growth and 33% incremental EBIT margins being too high. His analysis suggests that Hexcel’s sales and EPS will be lower than the Street’s estimates, which could result in the stock underperforming compared to its aerospace original equipment peers. Although there is a risk of downward revisions, Khanna notes that this is more a matter of timing rather than a fundamental issue, as the aerospace upcycle remains strong and Hexcel’s market position is stable.
According to TipRanks, Khanna is a top 100 analyst with an average return of 16.0% and a 70.48% success rate. Khanna covers the Industrials sector, focusing on stocks such as Boeing, Booz Allen, and KBR.