BofA Securities has upgraded Hexcel Corp. (NYSE: HXL) from Underperform to Neutral and increased its price objective to $95.00 from $60.00. The stock was trading at $87.85 at the time of the update, near its 52-week high of $89.00, having gained 42.4% over the prior six months.
Analyst Ronald Epstein framed the decision around Hexcel’s positioning in the commercial aerospace recovery, calling the company "an attractive widebody recovery option" as industry-wide destocking pressures recede. The upgrade accompanies a change in BofA’s valuation approach: the firm now uses a 1.1x multiple relative to the S&P 500 on 2027 estimates, up from its former 0.7x multiple, which underpins the higher price target.
Supporting the positive view, InvestingPro data indicate Hexcel was profitable over the last twelve months with a reported earnings per share of $1.37, and the company’s management has been actively repurchasing shares.
BofA also pointed to improving production rates at aircraft manufacturers as a factor that "shifts the balance of risks more favorably" for Hexcel, the composite materials supplier. Those production dynamics were coupled with the company’s most recent operating results for the fourth quarter of 2025.
Hexcel reported fourth-quarter EPS of $0.52, above the consensus forecast of $0.49. Revenue for the quarter came in at $491 million, exceeding the anticipated $480.16 million. The stronger-than-expected quarterly performance was followed by a positive market response in the company’s shares.
Despite the upgrade and recent earnings beat, BofA cautioned that margins "remain a watch item." The bank highlighted that rehiring costs and elevated inventory levels "could limit operating leverage" for Hexcel, indicating potential headwinds to margin expansion even as demand metrics improve.
Investors tracking Hexcel’s trajectory will likely weigh the firm’s renewed valuation multiple, recent profitability and buyback activity against the margin risks flagged by BofA. The combination of a higher target price and a more constructive view on aerospace production creates a nuanced backdrop for the supplier, balancing upside from a sector recovery with operational cost pressures that could temper earnings leverage.
Market context: The analyst upgrade and the earnings beat together informed the stock’s recent strength, while BofA’s commentary on rehiring and inventory highlights areas to monitor as production ramps continue.