EARNEST Partners Buys the Dip in Hexcel Stock: A Strategic Move?

EARNEST Partners Increases Stake in Hexcel: A Bullish Signal?

EARNEST Partners LLC has demonstrated confidence in Hexcel Corporation (NYSE:HXL) by increasing its position by 418,477 shares during the last quarter. The estimated transaction value, based on the quarterly average share price, was $22.13 million. This investment reflects a potentially positive outlook on Hexcel's future, a company specializing in advanced structural materials for aerospace, defense, and industrial applications.

According to a recent SEC filing dated August 15, 2025, the fund's total holdings in Hexcel were 5,140,542 shares as of June 30, 2025, with a reported market value of $290.39 million. This increase brings Hexcel's representation to 1.3% of EARNEST Partners' total 13F assets.

Hexcel's Market Position and Financial Overview

Hexcel is a key player in the advanced composites market, manufacturing carbon fibers, prepregs, adhesives, and engineered aircraft components. The company generates revenue through direct sales and distribution of its products globally. Its primary customers include commercial aerospace manufacturers, defense contractors, and industrial firms requiring high-performance materials.

As of August 18, 2025, Hexcel shares were priced at $61.57, with a dividend yield of 1.07% and a forward P/E (FY1 2026) of 25.11. Notably, the shares were priced 13.3% below their 52-week high.

Why the Dip Could Be a Buying Opportunity

EARNEST Partners' acquisition appears to be a calculated move, potentially capitalizing on a temporary dip in Hexcel's stock price. Hexcel has faced headwinds due to production delays at major customers like Airbus and Boeing. However, these companies have substantial order backlogs, suggesting strong future demand for Hexcel's products. Airbus boasts a backlog of 8,754 commercial airplanes, while Boeing's commercial airplane backlog exceeds 5,900.

Furthermore, Hexcel benefits from the increasing use of advanced composites in modern aircraft. This trend suggests long-term growth potential, even as the aerospace industry navigates supply chain challenges. The purchase could be a strategic long-term investment, anticipating future growth and a recovery in Hexcel's stock price.

Company Performance Metrics:

• Revenue (TTM): $4.9 billion
• Net Income (TTM): $1.88 billion
• Dividend Yield: 1.07%

Understanding the Aerospace Supply Chain Dynamics

The aerospace industry operates with complex, multi-tiered supply chains. Hexcel, as a supplier of advanced composite materials, sits further up the chain. Delays and disruptions at the OEM (Original Equipment Manufacturer) level, such as Airbus and Boeing, can significantly impact suppliers like Hexcel. Investors should consider these dynamics when evaluating aerospace companies. The aftermarket also represents an important revenue stream to the aerospace industry.