Hexcel Has Bounced On Bullish Aerospace And Commodity Sentiment

 

When I last wrote about Hexcel (HXL) in January of this year, I underestimated the potential tailwind the shares could get from a further sentiment shift back toward later-cycle recovery stories (like aerospace) and material plays in an inflationary environment. With that, the shares have risen nearly another 40%, underperforming a few other aero plays like Spirit AeroSystems (SPR) and Universal Stainless (USAP), but outperforming names like Carpenter (CRS), HEICO (HEI), and Woodward (WWD).

At this point I don't think Hexcel shares offer a particularly attractive long-term return, but I fully acknowledge that cyclical stocks overcorrect on both ends of the cycle, and the outlook for the company's commercial aerospace business (especially the wide-body business) should only improve from here.

 

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Hexcel Has Bounced On Bullish Aerospace And Commodity Sentiment