September looms as a risk month for stocks, Yardeni says
On Tuesday, BMO Capital Markets maintained its Market Perform rating on Hexcel Corp . (NYSE: NYSE:HXL) shares, with a steady price target of $72.00. The decision followed Hexcel’s earnings report, which showed the company’s earnings per share (EPS) at $0.37, falling short of BMO Capital’s estimate of $0.38 and the consensus estimate of $0.43. This earnings miss aligns with recent analyst sentiment, as InvestingPro data shows seven analysts have revised their earnings expectations downward for the upcoming period.
Hexcel’s management announced a reduction in their financial guidance, particularly noting weaker build ramps, with the A350 program highlighted as a notable example. The company has already begun making adjustments to its workforce to align with the revised plans. The market has responded to these challenges, with the stock declining over 21% in the past six months.
The analyst at BMO Capital pointed out that while market expectations were muted ahead of the earnings release due to concerns over build rate issues, the reduction in guidance ahead of any clear understanding of the potential impact from tariffs could keep Hexcel’s stock under pressure.
The report signifies a challenging period for Hexcel as they navigate customer delays and adjust their guidance in anticipation of possible headwinds from tariffs. Despite these setbacks, BMO Capital has not altered its Market Perform rating or price target for Hexcel, suggesting a wait-and-see approach as the company addresses its operational challenges.
In other recent news, Hexcel Corporation reported first-quarter earnings that did not meet analyst expectations, citing delays in commercial aircraft production, especially with the Airbus A350 program. The company posted adjusted earnings per share of $0.37, falling short of the consensus estimate of $0.43. Revenue was $456.5 million, which was below the expected $480.53 million and represented a 3.3% decrease from the same quarter last year. Hexcel has revised its 2025 outlook, now forecasting sales between $1.88 billion and $1.95 billion, down from the previous range of $1.95 billion to $2.05 billion. The adjusted EPS guidance has also been lowered to $1.85-$2.05 from $2.05-$2.25. Commercial Aerospace sales, which make up 61% of Hexcel’s total revenue, decreased by 6.4% year-over-year to $280.1 million, driven by lower Boeing (NYSE:BA) 787 and MAX sales. Despite these challenges, Hexcel returned $64 million to shareholders through share repurchases and dividends in the first quarter. Additionally, the company successfully refinanced $300 million of fixed-rate debt during this period.
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