Place the narrow end of the chisel against the wall at a 45-degree angle—the angle does not have to be precise—and tap the top of the chisel with your ball-peen hammer to chip away the edges of the damaged stucco. This will thin the edges enough to allow you to feather the new stucco onto them, which makes the patch less noticeable.
Cut a piece of support mesh that is large enough to cover the old mesh that has been exposed by the damaged stucco. This does not need to fit perfectly. Eyeball it the best you can, but make sure that none of the new mesh sticks out over the undamaged stucco.
Mix your stucco with water according to the manufacturer’s instructions. Different stucco mixes call for different proportions of water, so follow the recommendations on the brand you have chosen.
Trowel the stucco onto the wall in a thick layer, keeping it to within about ¼ inch below the surface of the existing stucco. You need to leave room for a second layer and a finish layer, and you don’t want the new stucco to stick out from the wall like a stone pimple.
Use the point or edge of the trowel to make score marks in several different directions in the stucco, when it is firm but not fully dried.
Let the stucco dry for two days.
Apply a second coat of stucco, building it up to within about 1/8 inch of the existing stucco’s surface. This measurement does not have be precise; just eyeball it. Make this layer a little smoother than the first one, and let it cure for two days.
Wet your trowel and smooth on the final coat of stucco. Feather the edges up over the existing stucco to blend in the patch, and try to keep the new stucco as level with the old stucco as you can. Try to match the texture, if you can. Let this final layer cure for at least four days.
Spray a coat or two of paint on the cured stucco, if the existing wall has been painted. If you do not have matching paint, you can take a small piece that you chipped off to a home improvement store to have the color matched.