Hexcel Corporation
Industrials · Aerospace & Defense
Structural: duopoly supplier (with Toray) of aerospace-grade carbon fiber prepreg into the two-OEM commercial aerostructures market - content per shipset rises with each new program ($1M+/787, ~$5M/A350, $0.5M/A320neo). Defense composites are a secular grower as F-35 production ramps and missile/UAV volumes step up.
(1) Build-rate recovery - Airbus targeting A320 rate 75/mo by 2027, A350 rate 12/mo by 2028; $BA 787 path back to 10/mo + 737 MAX rate ramp pull HXL volume directly. (2) Operating leverage - composites manufacturing is fixed-cost heavy; incremental margin on each shipset is 30%+.
(3) Defense mix - F-35 sustainment + NGAD + hypersonics all carbon-fiber intensive. (4) Pricing - long-term agreements with OEMs include cost-pass-through on resin/fiber inputs. (5) NEV / wind blade composites are a real but lumpy industrial leg.
(1) $BA quality/strike risk - every 787 delay or 737 production cap flows directly to HXL. ) - HXL must keep winning IM7/IM8 sole-source positions. (3) Capex cycle - Decatur AL + Salt Lake plants are running below nameplate; under-absorption hurts margin.
(4) Wind blade demand has been soft (Vestas/Siemens Gamesa cuts). (5) Multiple already prices a build-rate recovery that has slipped twice.
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