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Hexcel (HXL)
NYSE:HXL
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Hexcel
(NYSE:HXL)65Neutral
Positive Factors
OEM Production Rates
A more positive inflection in OEM production rates could support Hexcel's stock.
Negative Factors
Inventory Management
Excessive HXL inventory on the A350 and 787 is an increasing risk to HXL's growth rate.
Production Challenges
Airbus cites intensifying bottlenecks on the A350s 'Section 15' subassembly, which affects production rates.
Hexcel (HXL) vs. S&P 500 (SPY)
Market Cap
$4.87B
Dividend Yield1.07%
Average Volume (3M)985.48K
Price to Earnings (P/E)37.7
Beta (1Y)1.13
Revenue Growth6.31%
EPS Growth28.25%
CountryUS
Employees5,894
SectorIndustrials
Sector Strength66
IndustryAerospace & Defense
Share Statistics
EPS (TTM)1.59
Shares Outstanding81,131,630
10 Day Avg. Volume966,074
30 Day Avg. Volume985,478
Financial Highlights & Ratios
PEG Ratio1.33
Price to Book (P/B)N/A
Price to Sales (P/S)2.48
Price to Cash Flow (P/CF)7.20
P/FCF Ratio6.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$72.36Price Target Upside24.33% Upside
Rating ConsensusHold
Number of Analyst Covering11
Hexcel Business Overview & Revenue Model
Company DescriptionHexcel Corporation is a leading advanced composites company that develops, manufactures, and markets lightweight, high-performance structural materials. Headquartered in Stamford, Connecticut, Hexcel serves various industries including aerospace, defense, and industrial markets. The company is renowned for its carbon fiber reinforcements, composite fabrics, and resin systems, offering solutions that enhance performance, reduce weight, and improve energy efficiency.
How the Company Makes MoneyHexcel Corporation primarily generates revenue through the sale of advanced composite materials and technologies that cater to the aerospace, defense, and industrial sectors. The company's key revenue streams include the production and sale of carbon fibers, composite reinforcements, and engineered core products. Hexcel's products are integral to the manufacturing of aircraft structures, wind turbine blades, automotive components, and other industrial applications. Significant partnerships with leading aerospace and defense companies, such as Boeing and Airbus, contribute to Hexcel's earnings, as these partnerships ensure a steady demand for the company's materials. Additionally, innovation in composite technologies and expansion into emerging markets further bolster Hexcel's revenue growth.
Hexcel Financial Statement Overview
Summary
Hexcel demonstrates solid revenue growth and exceptionally strong cash flow metrics. However, challenges remain in operational efficiency and return on equity. The balance sheet is stable with moderate leverage, supporting a positive outlook for future growth.Income Statement
Hexcel's income statement shows a solid gross profit margin of 24.68% and a modest net profit margin of 6.94% for the latest annual period. The revenue growth rate from 2023 to 2024 was 6.39%, indicating a steady growth trajectory. However, there was a decline in EBIT margin from 12.04% to 9.78%, which could be a concern for operational efficiency. Despite this, the EBITDA margin remains robust at 9.78%.72
Positive
Balance Sheet
Hexcel's balance sheet reflects a healthy equity ratio of 56.07%, suggesting a substantial equity base relative to its total assets. The debt-to-equity ratio is moderate at 0.46, indicating prudent leverage. However, the return on equity (ROE) at 8.65% is relatively low, suggesting room for improvement in generating returns for shareholders.65
Positive
Cash Flow
The company demonstrates strong cash flow performance with a significant free cash flow growth rate of 149.10% from 2023 to 2024. The operating cash flow to net income ratio is 2.19, indicating effective cash generation from operations. Additionally, the free cash flow to net income ratio is 2.81, underscoring excellent cash profitability.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.90B | 1.79B | 1.58B | 1.32B | 1.50B | Gross Profit |
| 469.80M | 433.20M | 357.10M | 250.10M | 239.70M | EBIT |
| 186.10M | 215.30M | 175.20M | 51.80M | 14.10M | EBITDA |
| 186.10M | 268.50M | 312.20M | 198.30M | 14.10M | Net Income Common Stockholders |
| 132.10M | 105.70M | 126.30M | 16.10M | 31.70M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 125.40M | 227.00M | 112.00M | 127.70M | 103.30M | Total Assets |
| 2.73B | 2.92B | 2.84B | 2.82B | 2.92B | Total Debt |
| 700.70M | 699.50M | 723.50M | 823.30M | 926.40M | Net Debt |
| 575.30M | 472.50M | 611.50M | 695.60M | 823.10M | Total Liabilities |
| 1.20B | 1.20B | 1.28B | 1.33B | 1.41B | Stockholders Equity |
| 1.53B | 1.72B | 1.55B | 1.49B | 1.51B |
| Cash Flow | Free Cash Flow | |||
| 202.90M | 148.90M | 96.80M | 123.80M | 213.70M | Operating Cash Flow |
| 289.90M | 257.10M | 173.10M | 151.70M | 264.30M | Investing Cash Flow |
| -87.00M | -50.70M | -54.60M | -27.90M | -50.60M | Financing Cash Flow |
| -301.70M | -92.60M | -130.00M | -96.80M | -178.50M |
Hexcel Technical Analysis
Negative
58.20
Price Trends
64.21
Negative
62.97
Negative
63.09
Negative
Market Momentum
-1.62
Positive
32.84
Neutral
16.36
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HXL, the sentiment is Negative. The current price of 58.2 is below the 20-day moving average (MA) of 62.99, below the 50-day MA of 64.21, and below the 200-day MA of 63.09, indicating a bearish trend. The MACD of -1.62 indicates Positive momentum. The RSI at 32.84 is Neutral, neither overbought nor oversold. The STOCH value of 16.36 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HXL.
Hexcel Risk Analysis
Hexcel disclosed 20 risk factors in its most recent earnings report. Hexcel reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Hexcel Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $170.88B | 36.10 | 7.96% | 1.96% | 17.15% | 58.66% | |
71 Outperform | $40.26B | 27.14 | 7.85% | 2.17% | 9.82% | 22.33% | |
68 Neutral | $75.42B | 47.33 | -29.16% | ― | 16.89% | 20.33% | |
65 Neutral | $4.87B | 37.70 | 8.14% | 1.07% | 6.31% | 28.25% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% | |
38 Underperform | $3.92B | ― | 81.63% | ― | 4.44% | -202.63% | |
37 Underperform | $122.38B | ― | -162.23% | ― | -14.49% | -399.90% |
* Industrials Sector Average
Performance Comparison
HXL
Hexcel
58.20
-15.44
-20.97%
BA
Boeing
154.18
-38.31
-19.90%
LHX
L3Harris Technologies
220.10
8.65
4.09%
SPR
Spirit AeroSystems
33.17
-1.28
-3.72%
TDG
Transdigm Group
1,341.59
250.72
22.98%
RTX
RTX
128.40
38.96
43.56%
Hexcel Earnings Call Summary
Earnings Call Date: Jan 22, 2025 | % Change Since: -14.78% | Next Earnings Date: Apr 28, 2025
Earnings Call Sentiment Neutral
Hexcel delivered solid growth in revenue and cash flow, driven by strong performance in commercial aerospace and space & defense segments. However, challenges such as industrial sales decline and noncash charges related to divestitures offset some of the positive momentum. The company is strategically divesting non-core assets and focusing on its strengths in advanced materials, positioning itself for future growth.Highlights
Revenue Growth and Strong Cash Flow
Hexcel achieved a full-year sales of $1.903 billion, marking a 6.4% increase over 2023. The company generated a free cash flow of $202.9 million, showcasing robust financial health.
Commercial Aerospace and Space & Defense Growth
Commercial aerospace sales increased 11.9% for the year, with strong performers like the 787, A350, and A320neo. Space & Defense sales also grew by 4.6% for the full year, driven by programs such as F-35 and CH-53K.
Improved Margins
Hexcel reported an adjusted operating margin of 12.1% for the fourth quarter, up from 10.7% in the prior year, aided by higher sales and operational execution.
Strategic Divestitures
The company announced plans to divest its Neumarkt, Austria site and Hartford, Connecticut 3D printing business to focus on more strategic, value-add applications.
Lowlights
Industrial Sales Decline
Industrial sales decreased by 21.1% for the year, with a 14.8% decline in Q4, primarily due to weakness in automotive and wind submarkets.
737 MAX Challenges
Sales for the 737 MAX decreased due to production issues at Boeing, impacting Hexcel's overall commercial aerospace sales.
Noncash Charges
Hexcel took onetime noncash charges related to the Neumarkt divestiture, impacting Q4 results.
ERP Implementation Costs
The rollout of a new ERP system is expected to create short-term margin pressure due to expensed costs.
Company Guidance
During the Hexcel Corporation Q4 2024 earnings call, guidance for 2025 was provided, projecting sales between $1.95 billion and $2.05 billion, adjusted earnings per share (EPS) between $2.05 and $2.25, and free cash flow exceeding $220 million. The forecast anticipates high single-digit growth in Commercial Aerospace sales, driven by increasing demand and production rates for aircraft such as the Boeing 787 and Airbus A320neo. Conversely, Industrial sales are expected to decline, impacted by the planned divestment of the Neumarkt, Austria facility. The company also plans to divest its Hartford, Connecticut 3D printing business in early 2025. Operationally, Hexcel aims to manage cost headwinds from elevated headcount and increased R&T spending, while leveraging existing capacity to support growing production rates, ultimately seeking to enhance operating margins through improved overhead leverage and productivity initiatives.Hexcel Corporate Events
DividendsBusiness Operations and StrategyFinancial Disclosures
Hexcel Reports Strong Results and Positive Outlook
Positive
Jan 22, 2025
Hexcel Corporation reported strong financial results for 2024, with a 6% increase in sales driven by a 12% growth in commercial aerospace despite supply chain challenges. The company achieved a free cash flow of $203 million and increased its quarterly dividend by 13%. It also provided a positive outlook for 2025, expecting sales growth of 10% in commercial aerospace and forecasting cash generation to exceed $220 million. The company emphasized its commitment to operational excellence, innovation, and growth, including potential strategic acquisitions and enhanced production capabilities to meet increasing demand.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.