Hexcel Earnings: Expecting Flatter Aerospace Deliveries, Industrials Down; Fair Value Down $3 to $61

Narrow-moat Hexcel's second-quarter results in aerospace and defense markets came in close to our expectations. Still, its sales to other industries declined 25% in the first half, continuing years of declines in markets like windmills and automobiles. The company slightly trimmed its 2024 expectations of aerospace deliveries, driven by customers Airbus and Boeing, who are not accelerating their production pace as much this year as initially planned. We have lowered our fair value estimate by $3 to $61 mainly because we forecast continued declines in the industrials markets for the next decade.