HWM - Hexcel seen as aerospace laggard at Morgan Stanley with Underweight rating

Hexcel (HXL -2.6%) nears its lowest level since February after Morgan Stanley initiates coverage with an Underweight rating and a $55 price target, expecting the company will lag the broader aerospace recovery because of its large exposure to widebody original equipment. While Hexcel is one of only a few companies with the capability to produce intermediate modular carbon fiber, this capability is largely levered toward widebody aircraft, Morgan Stanley's Kristine Liwag says. The firm is more optimistic on Heico (HEI +0.3%), Howmet Aerospace (HWM +0.6%) and RBC Bearings (ROLL +1.3%), which are started with Overweight ratings. Heico is the largest independent supplier of non-OEM jet engine and aircraft component replacement parts, and Liwag sees the parts manufacturer approval market outpacing the overall aftermarket recovery. For Howmet, Liwag expects a COVID-19 recovery will "drive meaningful upside in earnings from higher commercial aircraft production rates and aftermarket." RBC Bearings is "a best-in-class operator

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Hexcel seen as aerospace laggard at Morgan Stanley with Underweight rating