Two Stocks Slammed by 2025's Tariffs and Supply Chain Woes Offer Buying Opportunities

The stock market’s 2025 turmoil, fueled by President Trump’s “Liberation Day” tariffs and retaliatory trade measures, has left investors scrambling to identify undervalued opportunities. Among the hardest-hit stocks are Deckers Outdoor Corp (NYSE: DECK), down over 50% from its 52-week high, and Hexcel (NYSE: HXL), which has shed 30% of its value this year. Both companies face near-term challenges tied to geopolitical and supply chain disruptions, but their fundamentals and long-term prospects suggest they could rebound sharply if market conditions stabilize.

Deckers Outdoor (DECK): Tariffs and Technical Breakdowns Mask a Resilient Brand

Deckers, parent company of iconic brands like UGG and HOKA, has been a poster child for the 2025 market crash. The stock plummeted 47% year-to-date (YTD) by April 2025, with its price falling below its critical 20-day moving average—a technical breakdown analysts view as a bearish signal. The immediate catalyst? Trump’s unilateral tariffs on imports from China and Vietnam, which disrupted Deckers’ supply chains. Roughly 70% of UGG boots and HOKA shoes are manufactured in these regions, and the administration’s 54% tariffs on Chinese goods forced the company to absorb steep production cost increases.

Yet, beneath the volatility lies a company with enduring brand power. Despite the tariffs, Deckers reported solid Q3 earnings in January 2025, with revenue up 8% year-over-year, driven by HOKA’s athletic footwear dominance. Analysts at Raymond James recently upgraded DECK to “Strong Buy”, citing a potential 75% upside if tariff policies stabilize. A key inflection point came on April 9, when Trump announced a 90-day tariff reprieve—though China’s retaliatory tariffs remain at 125%—triggering a 9% S&P 500 rally that briefly lifted Deckers’ stock.

The path to recovery hinges on two factors:
1. Tariff Policy: A permanent reduction in U.S.-China tariffs would alleviate supply chain pressures.
2. Technical Reversal: Deckers must reclaim its $120 price level, a key resistance point that could signal a short-term bottom.

Hexcel (HXL): Aerospace Headwinds Create a Deep-Value Opportunity

Hexcel, a leading supplier of carbon fiber composites for Boeing and Airbus, has been dragged down by supply chain bottlenecks in the aerospace sector. Its stock dropped 30% from its 2025 high after the company revised its full-year guidance due to delays in the Airbus A350 program. Shipments of composites for the A350 fell from an anticipated 84 units to just 68, slicing revenue expectations.

Despite the near-term pain, Hexcel’s long-term story remains intact. Boeing and Airbus retain multiyear backlogs, and Hexcel’s existing capacity is already scaled to meet higher production rates once supply chains normalize. Management emphasized that its $190 million 2025 FCF estimate and $1.85–$2.05 diluted earnings guidance position the stock at a 25x earnings multiple—a discount to its growth trajectory. Additionally, Hexcel’s local sourcing in the U.S. and Europe shields it from tariff risks, with incremental costs estimated at just $3–$4 million per quarter, easily offset by productivity gains.

Why These Stocks Are Buys Now

Both DECK and HXL face sector-specific headwinds, but their valuations and strategic advantages suggest they’re primed for a rebound:

1. Deckers:
2. Brand Resilience: UGG’s 50-year legacy and HOKA’s athletic footwear dominance provide a moat.
3. Analyst Consensus: A “Moderate Buy” rating (based on 20 ratings) reflects cautious optimism.

4. Market Context: The S&P 500’s 8% YTD decline as of April 2025 underscores that broader market volatility, not fundamentals, has driven the sell-off.

5. Hexcel:

6. Aerospace Backlog: Boeing and Airbus have $1 trillion in orders for commercial aircraft, ensuring long-term demand.
7. Valuation Edge: Trading at 20x FCF, Hexcel’s price reflects downside risks already priced in.
8. Tariff Mitigation: Local sourcing strategies limit exposure to trade wars, unlike Deckers’ China-heavy supply chain.

Conclusion: Ride Out the Storm for Long-Term Gains

The 2025 market crash has created a rare buying opportunity in two fundamentally strong companies. Deckers’ 47% YTD decline and Hexcel’s 30% drop reflect macroeconomic fears rather than permanent damage. With the S&P 500 down 12% from its 52-week high and the VIX volatility index spiking to 45.31, uncertainty remains. However, the data suggests both stocks are undervalued relative to their growth trajectories:

• Deckers’ 75% upside potential (per Raymond James) aligns with its brand strength and HOKA’s athletic dominance.
• Hexcel’s $190 million FCF forecast and $1 trillion AI-driven composites market offer a runway for recovery.

Investors willing to endure near-term volatility could reap rewards as trade tensions ease and supply chains normalize. For now, these stocks represent contrarian bets in a market that’s overly focused on short-term noise.

Final Note: Always conduct further research and consult a financial advisor before making investment decisions.