A bad year for Boeing translated into a miserable year for owners of some of the aerospace giant's largest suppliers.

In a year when the S&P 500 was up 23%, Hexcel (HXL 0.54%) shares traded down 15%, according to data provided by S&P Global Market Intelligence, as the aerospace supplier dealt with choppy demand for the composite materials that have become a foundational part of new aircraft manufacture.

A big customer hits continued snags

Hexcel specializes in the production of carbon fiber materials that offer the durability of metals at a fraction of the weight, making them ideal for making airplanes and other large equipment more fuel efficient. Though the company sells to a variety of industrial and defense customers, commercial aerospace makes up nearly two-thirds of revenue.

Boeing, a big customer, has not been buying as much material as it had planned to just a few years ago. Boeing has been mired in a slump of its own doing. The company has experienced a number of high-profile manufacturing and engineering snafus in recent years, leading to a government-ordered slowdown in aircraft manufacturing.

There are a limited number of customers for Hexcel's materials, and Boeing's troubles trickled down to Hexcel productions. During 2024 Hexcel was forced to lower its financial expectations for the year and withdraw its longer-term guidance for double-digit compound annual revenue growth through 2026.

While there is reason to hope the worst is behind Boeing, it could take years for the company to regain its footing and normalize aircraft production. With most of Hexcel's troubles outside of management's control and no clear timetable for when things will recover, investors ran for the exits in 2024.

Is Hexcel a buy in 2025?

Even as demand slumped, Hexcel management did a decent job returning capital to investors. The company's share count has fallen by about 4% in the past year and is down 16% over the past decade. Hexcel also pays a modest dividend, currently yielding about 1%.

The cash is at least some reason to stay patient, but investors are eventually going to need to see the business rebound for this investment to work out. Hexcel's composite materials are a must-have part of the new plane supply chain, and with Airbus forecasting demand for more than 42,000 new deliveries over the next 20 years there should be ample need for Hexcel's products.

The question is how quickly that demand materializes. There is great potential here, but investors will need to wait out Boeing's slump to see Hexcel gain altitude from here.