Hexcel Corp. (HXL): Long-term growth, but choppy near-term margins; Neutral

Following 3Q26 results, we remain Neutral on Hexcel (HXL) with a 12-month price target of $90 (down from $97), implying 10.7% upside to the $81.27 share price. 3Q26 adjusted EPS of $0.50 was slightly above the FactSet consensus of $0.49, while revenue of $496mn and an adjusted EBIT margin of 11.0% were below consensus; free cash flow of $51mn also missed the $80mn consensus. Management reiterated 2026 guidance for revenue of $2.025-$2.125bn, adjusted EPS of $2.30-$2.40 and free cash flow above $195mn. Hexcel should benefit from long-term growth as new aircraft production ramps up, but near-term margins have been choppy and may face additional costs in coming quarters. Our target price blends 17.5x 2027E EV/EBITDA (85% weight) and 20.0x for the M&A component (15% weight). Key risks include next-generation aircraft content, capex requirements as the company scales, and the pace of aerospace growth.