KeyBanc Downgrades Hexcel Corporation (HXL) to Hold

June 15, 2009 9:14 AM EDT

KeyBanc downgrades Hexcel Corporation (NYSE: HXL) to Hold.

KeyBanc analyst says, "Considering the strong run in the stock price, which has resulted in HXL achieving our 12-month price target, and some concern over the severity of the commercial aerospace downturn, we are downgrading HXL to HOLD. Additionally, we are making a modest reduction to our 2009E outlook to reflect the higher cost of debt following the recent credit facility refinancing. We now see 2009E EPS coming in at $0.77 vs. $0.82 last year and down from our prior estimate of $0.80. Our outlook for 2H09 still comes with limited visibility due to uncertainty on 2010 build rates at Boeing (NYSE: BA) and Airbus, and the risk of some deceleration in wind sales. With that said, we continue to like the long-term story considering secular growth trends in carbon fiber composite usage, a strong commercial aerospace backlog, viable long-term growth potential in wind energy and steady demand in space/defense markets. The stock continues to trade at the lower end of its historical EV/EBITDA range. While we sense there could be some additional upside from multiple expansion, following the strong run in the stock price since March lows, the risk/reward profile appears fairly evenly balanced, supporting our HOLD rating."

To see more analyst ratings on HXL Click Here.

Hexcel Corporation (Hexcel) is an advanced composites company. Hexcel develops, manufactures and markets lightweight, high-performance composites, including carbon fibers, reinforcements, prepregs, honeycomb, matrix systems, adhesives and composite structures, for use in the commercial aerospace, space and defense, and industrial applications.

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