Hexcel (HXL) AI Stock Analysis

• Market Cap: $4.87B
• Dividend Yield: 1.04%
• Average Volume (3M): 1.11M
• Price to Earnings (P/E): 56.8
• Beta (1Y): 1.19
• Revenue Growth: 1.92%
• EPS Growth: -15.47%
• Country: US
• Employees: 5,894
• Sector: Industrials
• Sector Strength: 76
• Industry: Aerospace & Defense
• EPS (TTM): 0.50
• Shares Outstanding: 79,563,350
• 10 Day Avg. Volume: 801,392
• 30 Day Avg. Volume: 1,114,161
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 2.83
• Enterprise Value/Gross Profit: 12.08
• Enterprise Value/Ebitda: 23.42
• 1Y Price Target: $64.00
• Price Target Upside: 0.88% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

• Rating: 74 Outperform
• Price Target: $70.00 ▲(10.34% Upside)

Hexcel's overall stock score reflects strong technical momentum and solid financial performance, tempered by high valuation and mixed earnings call sentiment. The company's strengths in cash flow and defense sales are offset by challenges in commercial aerospace and high P/E ratio.

Positive Factors

Future Production Rates

In the longer term, improving new aircraft production rates should be a tailwind to HXL.

Revenue and Earnings

HXL 2Q25 results came in above consensus on revenue and EPS.

Space and Defense Demand

Demand for HXL's space/defense products remains strong.

Negative Factors

A350 Demand Volatility

This volatile A350 demand pattern raises some risk that Q4's expected demand surge may carry some inefficiency, even though HXL has ample staff/capacity to deliver.

Guidance and Market Challenges

HXL has trimmed its FY guidance to $1.85-2.05 vs. the prior guide of $2.05-2.25, indicating challenges in the Comm markets.

Supply Chain Issues

The supply chain issues across the aerospace industry have negatively impacted HXL's earnings again.

Hexcel Business Overview & Revenue Model

Company Description

Hexcel Corporation (HXL) is a global leader in advanced composite materials, specializing in the design and manufacture of lightweight, high-performance materials used primarily in the aerospace, defense, and industrial markets. The company’s core products include carbon fiber, honeycomb and prepreg composite materials, and engineered reinforcements, which are essential for applications that require high strength-to-weight ratios and enhanced performance. Hexcel's innovative solutions are integral to the production of aircraft, wind turbines, automotive components, and various industrial applications.

How the Company Makes Money

Hexcel generates revenue through the sale of its advanced composite materials and solutions across multiple sectors, with a significant focus on aerospace and defense. The company earns money primarily through direct sales to original equipment manufacturers (OEMs) and tiered suppliers in the aerospace industry, which account for a substantial portion of its revenue. Additionally, Hexcel has established key partnerships with major aerospace companies, including Boeing and Airbus, which enhance its market presence and provide a steady demand for its products. The company also sees revenue from industrial applications, where its materials are utilized in wind energy, automotive, and sporting goods industries. Hexcel's commitment to research and development further enables it to introduce innovative products, enhancing its competitive edge and contributing to its financial growth.

Hexcel Financial Statement Overview

Summary

Hexcel exhibits a strong financial foundation with solid profitability, a healthy balance sheet, and robust cash flow management. Although there are challenges in revenue growth and return on equity, the overall financial standing is positive.

Income Statement

Hexcel demonstrates a solid income statement performance with a strong gross profit margin of 23.39% and a respectable net profit margin of 4.69% for TTM (Trailing-Twelve-Months). The net income has shown fluctuations, with a decline in revenue growth rate from 2024 to TTM, indicating potential challenges in maintaining revenue momentum. Nevertheless, the overall profitability metrics remain robust, showcasing the company's efficiency in managing its cost structures.

Balance Sheet

The balance sheet reflects a stable financial position with a moderate debt-to-equity ratio of 0.53 and an equity ratio of 54.64% for TTM. The return on equity has slightly decreased to 5.66% in the TTM period, indicating a potential area for improvement in generating returns for shareholders. However, the company maintains a healthy equity base, providing a strong cushion against liabilities.

Cash Flow

Cash flow analysis reveals a strong operating cash flow to net income ratio of 2.81, indicating excellent cash generation capability relative to net income. The free cash flow to net income ratio stands at 1.94, further emphasizing the company's ability to convert earnings into cash effectively. Despite a decline in free cash flow growth rate, the overall cash flow strength supports ongoing operations and potential future investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.88B	1.90B	1.79B	1.58B	1.32B	1.50B
Gross Profit	438.90M	469.80M	433.20M	357.10M	250.10M	239.70M
EBITDA	226.50M	310.10M	268.50M	312.20M	198.30M	155.00M
Net Income	88.00M	132.10M	105.70M	126.30M	16.10M	31.70M
Balance Sheet
Total Assets	2.84B	2.73B	2.92B	2.84B	2.82B	2.92B
Cash, Cash Equivalents and Short-Term Investments	77.20M	125.40M	227.00M	112.00M	127.70M	103.30M
Total Debt	827.70M	700.70M	699.50M	773.10M	874.00M	926.40M
Total Liabilities	1.29B	1.20B	1.20B	1.28B	1.33B	1.41B
Stockholders Equity	1.55B	1.53B	1.72B	1.55B	1.49B	1.51B
Cash Flow
Free Cash Flow	170.70M	202.90M	148.90M	96.80M	123.80M	213.70M
Operating Cash Flow	247.50M	289.90M	257.10M	173.10M	151.70M	264.30M
Investing Cash Flow	-77.90M	-87.00M	-50.70M	-54.60M	-27.90M	-50.60M
Financing Cash Flow	-169.80M	-301.70M	-92.60M	-130.00M	-96.80M	-178.50M

Hexcel Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 63.44
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HXL, the sentiment is Positive. The current price of 63.44 is above the 20-day moving average (MA) of 61.29, above the 50-day MA of 59.10, and above the 200-day MA of 58.71, indicating a bullish trend. The MACD of 0.86 indicates Positive momentum. The RSI at 62.60 is Neutral, neither overbought nor oversold. The STOCH value of 57.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HXL.

Hexcel Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MOG.A	78 Outperform	$6.09B	29.06	11.32%	0.60%	4.77%	4.50%
VSEC	77 Outperform	$3.33B	92.24	6.22%	0.25%	13.00%	120.90%
HXL	74 Outperform	$4.87B	56.80	5.63%	1.04%	1.92%	-15.47%
KTOS	68 Neutral	$10.81B	689.59	0.88%	―	7.76%	40.33%
Sector *	64 Neutral	$10.71B	16.03	7.42%	2.02%	2.57%	-16.39%
MRCY	63 Neutral	$3.85B	―	-2.57%	―	9.19%	72.88%
SPR	51 Neutral	$4.67B	―	81.63%	―	-2.60%	-94.76%

Hexcel Corporate Events

Hexcel Reports Q2 2025 Results with Sales Decline

On July 24, 2025, Hexcel Corporation reported its second quarter 2025 results, showing a decrease in net sales to $490 million from $500 million in the same quarter of 2024. The company experienced a decline in commercial aerospace sales, particularly in major programs like Airbus A350, due to production rate decreases and inventory destocking. However, there was growth in the Defense, Space & Other segment, driven by programs like Sikorsky CH-53K and international fighter programs. Hexcel also completed the closure of its Belgium facility, incurring restructuring charges, and continued its strategic review of other operations. Despite challenges, Hexcel remains optimistic about future growth, supported by ongoing stock repurchases and participation in industry events like the Paris Air Show.

Hexcel Announces Leadership Transition Plans

On July 7, 2025, Hexcel Corporation announced that Thierry Merlot, President of Aerospace – EMEA/AP & Industrial, plans to retire in 2026. In preparation, he will transition to Executive Vice President – Strategy by September 29, 2025, with a successor expected to be appointed around the same date.