Hexcel (NYSE: HXL), a leading supplier of advanced composite materials, is best described as the “nearly” stock of the aerospace sector. However, its time will surely come, and its long-term growth prospects remain excellent. If you are prepared to be patient, then initiating a position when sentiment is against the stock could be a smart decision for a long-term investor. This stock could make you richer.
There’s very little aftermarket demand for Hexcel’s carbon fiber composites, so any reduction in airplane production expectations at its two key customers — Airbus and Boeing — hits Hexcel hard. Approximately 40% of 2024 sales were allocated to Airbus and its subcontractors, while Boeing and its subcontractors accounted for 15%.
Unfortunately, both airline manufacturers suffered production shortfalls last year, and Airbus has already lowered its expectations for 2025, notably for the composite-rich A350 widebody, an airplane with a shipset value of $4.5 million to $5 million.