Plastic Materials, Synth Resins & Nonvulcan Elastomers
Hexcel Corporation develops, manufactures, and markets carbon fibers, structural reinforcements, honeycomb structures, resins, and composite materials and parts for use in commercial aerospace, space and defense, and industrial applications. It operates through two segments, Composite Materials and Engineered Products. The Composite Materials segment manufactures and markets fabrics, multi-axials, specialty reinforcements, prepregs and other fiber-reinforced matrix materials, structural adhesives, molding compounds, tooling materials, polyurethane systems, and laminates that are used in military and commercial aircraft, wind turbine blades, recreational products, and other industrial applications, as well as in automotive, marine, and rail transportation. The Engineered Products segment manufactures and markets aircraft structures and finished aircraft components, including wing to body fairings, wing panels, flight deck panels, door liners, rotorcraft blades, spars, and tip caps; and aircraft structural sub-components and semi-finished components used in rotorcraft blades, engine nacelles, and aircraft surfaces, such as flaps, wings, elevators, and fairings; and RF interference control products for military and aerospace applications. This segment also provides interference control materials, structural composites, and services; dielectric absorber foams; magnetic absorbers; and thermoplastics for commercial and defense applications. The company sells its products directly through its managers, product managers, and sales personnel, as well as through independent distributors in the Americas, Europe, the Asia Pacific, India, and Africa. Hexcel Corporation was founded in 1946 and is headquartered in Stamford, Connecticut.
Discounted Cash Flow Valuation of Hexcel Corp
Growth
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Discount
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Multiple
g\r | +10% | +11% | +12% | +13% | +14% |
---|---|---|---|---|---|
0% | 10 | 9 | 8 | 8 | 7 |
+1% | 11 | 10 | 9 | 8 | 8 |
+2% | 13 | 11 | 10 | 9 | 8 |
+3% | 14 | 13 | 11 | 10 | 9 |
+4% | 17 | 14 | 12 | 11 | 10 |
Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
---|---|---|---|---|---|---|---|---|---|---|---|---|
FCF | $154.7M | $155.7M | $156.7M | $157.8M | $158.8M | $159.9M | $160.9M | $162M | $163M | $164.1M | $165.2M | $1.652B |
DCF | $135.4M | $118.5M | $103.7M | $90.8M | $79.48M | $69.57M | $60.89M | $53.3M | $46.65M | $40.83M | $408.3M | |
Value | $1.207B |
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Net Margin | 13% | 12% | 14% | 13% | 13% | 2.1% | 1.2% | 8% | 5.9% | 5.5% |
ROA | 15% | 15% | 13% | 13% | 14% | 0.48% | 2.1% | 6.6% | 7.4% | 7.3% |
ROE | 20% | 20% | 19% | 21% | 21% | 2.1% | 1.1% | 8.1% | 6.2% | 6.1% |
The average Net Margin over the past 5 years is +7.15%.
The trend of Net Margin over the past 5 years is -1.42%.
The average ROA over the past 5 years is +7.21%.
The trend of ROA over the past 5 years is -1.38%.
The average ROE over the past 5 years is +9.93%.
The trend of ROE over the past 5 years is -3.26%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Debt FCF | -134.07 | 9.43 | 5.41 | 4.07 | 3.69 | 4.34 | 6.65 | 7.47 | 4.70 | 4.62 |
Debt Equity | 0.49 | 0.56 | 0.54 | 0.73 | 0.73 | 0.61 | 0.55 | 0.47 | 0.41 | 0.44 |
MIN | ||||||||||
Graham Stability | - | - | 100% | 100% | 100% | 11% | 7.9% | 100% | 100% | 7.9% |
The Debt/FCF trailing twelve month is 4.62.
The trend of Debt/FCF over the past 5 years is 0.48.
Graham’s Stability measure stands at 0.08.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
Years | 12-2016 | 12-2018 | 12-2020 | 12-2022 | Trend |
---|---|---|---|---|---|
Revenue | -1.6% | -4% | 6% | 13% | 0.31% |
Net Income | -12% | -18% | 49% | -16% | 28% |
Stockholders Equity | 4.7% | 5.4% | 4.4% | 10% | 0.021% |
FCF | 11% | -8.9% | -11% | 54% | -13% |
The Revenue CAGR over the past 5 years is -3.96%.
The trend of Revenue growth rate over the past 5 years is +0.31%.
The Earnings CAGR over the past 5 years is -17.5%.
The trend of Earnings growth rate over the past 5 years is +28.44%.
The Equity CAGR over the past 5 years is +5.36%.
The trend of Equity growth rate over the past 5 years is +0.02%.
The FCF CAGR over the past 5 years is -8.9%.
The trend of FCF growth rate over the past 5 years is -13.39%.