Is Hexcel (HXL) Setting Up for a Big Move?

Hexcel Corp. (HXL) designs and manufactures high-performance composites, including carbon fibers, for use in commercial aerospace, defense, and other industrial markets. The company operates under two segments: composite materials and engineered products…

Hexcel Corp. (HXL) has been dealing with the implications of the COVID pandemic as it has had to reduce its workforce and cut costs. The spread of the virus caused a decline in air travel. Its commercial aerospace sales fell 24.6% in the second quarter and the company continues to deal with the pandemic’s effect in its industrial sales.

As of the most recent quarter, the company only had $115 million in cash, but it also had no short-term debt. Sales have been down an average of 16.6% a year for the past three years and are expected to fall 3% year over year in the current quarter.

The stock is also overvalued with a forward P/E of 32.68. It had been trending higher from last fall into March, but performance has been mixed ever since. This is evident in the chart below.

Take a look at the 1-year chart of HXL below with added notations…

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