Hexcel Corp. (HXL, Financial), a crucial supplier for Boeing Co. (BA, Financial), experienced its most significant drop in shares in four years, following the announcement of an unexpected change in its CEO, which raised eyebrows among investors.
Tom Gentile is set to assume the role of CEO at Hexcel on May 1, with plans to join the board shortly thereafter. This news comes after Gentile's sudden departure from his previous position as CEO of Spirit AeroSystems Holdings Inc. (SPR, Financial), another company that supplies to the aviation industry, which has been under intense scrutiny for quality issues across various aircraft models.
Analysts have expressed their concerns regarding the new appointment. Michael Ciarmoli of Truist Securities described the move as "unnerving" and "curious," highlighting Spirit's troubled history with quality control, cash flow, and margin expansion. Chris Olin from Northcoast Research pointed out that Gentile's final years at Spirit might be a focal point of concern for Hexcel's investors. Following the CEO change announcement, both Northcoast and Bank of America downgraded Hexcel's stock.
On Wednesday, Hexcel's shares plummeted by as much as 13% in New York, marking the largest intraday decrease since March 2020.
