HXL - Carpenter Technology Is Just A Passenger Now As The Aero Cycle Sorts Itself Out
- Despite past efforts to improve the cost structure and diversify the business, aerospace demand is driving this business, leading to weaker than expected FQ1 revenue and margins.
- Aero is going to need a couple of more quarters to bottom out, but vehicle, power, and medical demand should pull the business off the bottom before that aero stabilization.
- Soft magnetic alloys make for a good story and more leverage to electric vehicles (and some consumer and industrial end-markets), but I don't believe they change the fundamental long-term story.
- Carpenter has some trading upside into the high-$20s, but it's early to play cyclical aerospace turnaround names.
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Carpenter Technology Is Just A Passenger Now As The Aero Cycle Sorts Itself Out