Is Defense and Space Momentum Reshaping the Investment Case for Hexcel (HXL)?

• Hexcel recently reported Q2 2025 results that surpassed analyst expectations for revenue, despite a 2.1% year-on-year decline, and noted modest sequential growth in most major commercial aerospace programs.
• A particularly important insight is Hexcel's resilience in the face of softness in the Airbus A350 program, as the company saw robust growth in its Defense, Space, and Other segments, highlighting the benefits of diversification across end markets.
• With renewed momentum from Defense and Space growth, we’ll explore how this latest performance impacts Hexcel’s longer-term investment narrative.

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Hexcel Investment Narrative Recap

Hexcel’s investment story largely revolves around the company’s role as a supplier to commercial aerospace and defense markets, where long-term aircraft program cycles and growing adoption of advanced composites shape the outlook. The recent Q2 2025 results reinforced that the biggest short-term catalyst, an anticipated recovery in commercial aircraft production, remains hampered by softness in the Airbus A350 program. Importantly, this news event does not materially reduce the major risk stemming from Hexcel’s reliance on a few large customers, nor persistent supply chain challenges.

Of particular relevance to these catalysts, Hexcel’s reaffirmed full-year 2025 revenue guidance ($1.88 billion to $1.95 billion) underlines management’s confidence in continued Defense and Space growth offsetting commercial program headwinds. With the latest quarterly results highlighting modest sequential improvements in three out of four major commercial aerospace programs, the company’s near-term trajectory is still sensitive to developments in civil aviation demand and any further production rate changes from Airbus or Boeing.

By contrast, investors should be aware that ongoing supply chain disruptions, especially affecting key programs like the Airbus A350, could ...

Read the full narrative on Hexcel (it's free!)

Hexcel's outlook anticipates $2.5 billion in revenue and $284.0 million in earnings by 2028. This projection implies annual revenue growth of 10.0% and an earnings increase of $196.0 million from the current $88.0 million.

Uncover how Hexcel's forecasts yield a $65.33 fair value, a 4% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members have offered three fair value estimates for Hexcel, ranging from US$52 to over US$106. As production bottlenecks and customer concentration risk continue, you can see how widely opinions about future prospects differ, explore several of these viewpoints to sharpen your own outlook.

Explore 3 other fair value estimates on Hexcel - why the stock might be worth 17% less than the current price!

Build Your Own Hexcel Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Hexcel research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Hexcel research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Hexcel's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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