Hexcel (HXL) Stock Forecast & Price Target

Hexcel is positioned for strong growth, with expectations of nearly a 50% increase in WB revenues projected from 2026 to 2028, reflecting increased investor confidence in the original equipment cycle. The company's Defense, Space & Other segment experienced a notable 13.3% year-over-year increase in sales, surpassing consensus expectations, and contributing to a free cash flow (FCF) of approximately $96.5 million—up 32% year-over-year. The company benefits from positive developments in key aerospace programs, particularly with the A320 program seeing renewed momentum, positioning Hexcel to capitalize on rising demand in both commercial and defense sectors.

Hexcel's financial outlook is negatively impacted by a downward revision in revenue and EPS guidance due to ongoing destocking pressures and tariffs, with estimated impacts of $3-4 million per quarter translating to approximately $0.10 in EPS. The company's commercial aerospace segment reported a year-over-year sales decline of 8.6%, despite a modest growth in business jets, indicating challenges in ramping production among its major clients, Airbus and Boeing. Additionally, operating margins experienced a significant contraction, dropping by 260 basis points year-over-year, which reflects the adverse effects of inventory reductions and higher interest expenses.