What Happened?
Shares of aerospace and defense company Hexcel (NYSE: HXL) fell 9.9% in the morning session after the company reported weak first quarter 2025 results. Its revenue, EPS, and EBITDA missed analysts' estimates. Hexcel also cut its full-year revenue and profit forecasts in response to continued supply chain delays. A key concern was the commercial aerospace sales which dropped over 6%, hit hard by slower production on jets like the 787 and A350. That dragged overall sales down 3%, and profits dropped too, with lower volumes making it harder to cover fixed costs. Defense and space did okay, up almost 3%, but that just wasn't enough to balance out the hit in commercial. Overall, this quarter could have been better.
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What The Market Is Telling Us
Hexcel’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock dropped 5.9% on the news that the company reported weak second quarter earnings. Its full-year EPS forecast was underwhelming and its full-year revenue guidance was lowered to slightly below Wall Street's estimates.
On the other hand, Hexcel blew past analysts' revenue and EPS estimates during the quarter. Zooming out, we think the quarter was fine, but the guidance is weighing on shares.
Hexcel is down 22.7% since the beginning of the year, and at $47.79 per share, it is trading 34.8% below its 52-week high of $73.28 from May 2024. Investors who bought $1,000 worth of Hexcel’s shares 5 years ago would now be looking at an investment worth $1,738.
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