Hexcel (HXL) Stock Forecast & Price Target

Hexcel is positioned to benefit from heightened investor confidence in the original equipment cycle, projecting approximately a 50% increase in wide-body revenues between 2026 and 2028. The company's defense segment demonstrated robust performance with a year-over-year sales increase of 13.3%, reaching $182 million, and surpassing consensus estimates by 11%, while free cash flow rose by 32% to approximately $96.5 million, exceeding projections by 21%. Additionally, the anticipated growth in the A320 program driven by increased delivery guidance from GE Aerospace and new assembly line operations by Safran, along with rising European defense spending, further reinforces the positive outlook for Hexcel's ongoing financial performance.

Hexcel's financial outlook appears negative due to a notable decline in Q2 sales and operating margins, with Commercial Aerospace sales dropping 8.6% year-over-year, impacted by ongoing supply chain issues and destocking pressures. The company's adjusted operating margin also decreased to 9.8%, reflecting a combination of tariff impacts and reduced inventory levels, while management anticipates continued destocking pressures and a seasonal dip in Q3 earnings. Additionally, a downward revision in EPS guidance incorporates the financial strain from tariffs and heightened interest expenses, further signaling challenges ahead for the company's profitability.