Ronald Epstein, an analyst from Bank of America Securities, maintained the Sell rating on Hexcel (HXL – Research Report). The associated price target remains the same with $65.00.
Ronald Epstein has given his Sell rating due to a combination of factors primarily concerning Hexcel Corporation’s financial performance and management transition risks. The company’s adjusted EPS for the first quarter of 2024 fell short of Bank of America’s expectations, coming in at $0.44 compared to the anticipated $0.55, attributed to weaker revenue and margins in its Composite Materials segment. Moreover, Hexcel’s Composite Materials revenues and operating margin were both below Bank of America’s estimates, indicating softer performance than projected.
Additionally, despite Hexcel maintaining its full-year 2024 outlook, the firm is undergoing a transition in leadership, with a new CEO and President set to assume their roles in May 2024. Epstein believes that until the new management team has established itself and demonstrated its effectiveness, it is unlikely that Hexcel will command the premium valuation it historically enjoyed. This uncertainty around the management transition adds to the rationale behind the Sell rating.
According to TipRanks, Epstein is a 5-star analyst with an average return of 7.2% and a 59.63% success rate. Epstein covers the Industrials sector, focusing on stocks such as Boeing, Hexcel, and CAE.
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Hexcel (HXL) Company Description:
Hexcel Corp. engages in the development, manufacture, and market of advanced composite materials for the commercial aerospace, space and defense, and industrial markets. It operates through the following segments: Composite Materials; Engineered Products; and Corporate and Other. The Composite Materials segment comprises of carbon fiber, specialty reinforcements, resins, prepregs and other fiber-reinforced matrix materials, and honeycomb core product lines and pultruded profiles. The Engineered Products segment consists of lightweight high strength composite structures, engineered core and honeycomb products with added functionality, and additive manufacturing. The company was founded by Roger C. Steele and Roscoe T. Hughes in 1946 and is headquartered in Stamford, CT.
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