Hexcel Corp

HXL

Plastic Materials, Synth Resins & Nonvulcan Elastomers

Mkt Cap

$5.851B

PE

58.81

Debt

$714.7M

Cash

$85.9M

EV

$6.48B

FCF

$154.7M

Market Cap

$5.851B

P/E Ratio

58.81

Debt

$714.7M

Cash

$85.9M

EV

$6.48B

FCF

$154.7M

Charts data: {"Earnings":[{"time":"2014-12-30","value":209400000},{"time":"2015-12-30","value":237200000},{"time":"2016-12-30","value":249800000},{"time":"2017-12-30","value":284000000},{"time":"2018-12-30","value":276600000},{"time":"2019-12-30","value":306600000},{"time":"2020-12-30","value":31700000},{"time":"2021-12-30","value":16100000},{"time":"2022-12-30","value":126300000},{"time":"2023-12-30","value":105700000}],"Sales":[{"time":"2014-12-30","value":1855500000},{"time":"2015-12-30","value":1861200000},{"time":"2016-12-30","value":2004300000},{"time":"2017-12-30","value":1973300000},{"time":"2018-12-30","value":2189100000},{"time":"2019-12-30","value":2355700000},{"time":"2020-12-30","value":1502400000},{"time":"2021-12-30","value":1324700000},{"time":"2022-12-30","value":1577700000},{"time":"2023-12-30","value":1789000000}],"Net Margins":[{"time":"2014-12-30","value":0.11285367825383993},{"time":"2015-12-30","value":0.127444659359553},{"time":"2016-12-30","value":0.12463204111161004},{"time":"2017-12-30","value":0.14392135002280443},{"time":"2018-12-30","value":0.12635329587501712},{"time":"2019-12-30","value":0.13015239631532027},{"time":"2020-12-30","value":0.02109957401490948},{"time":"2021-12-30","value":0.012153695176266325},{"time":"2022-12-30","value":0.08005324206122837},{"time":"2023-12-30","value":0.059083286752375626}],"Assets":[{"time":"2014-12-30","value":2036400000},{"time":"2015-12-30","value":2187400000},{"time":"2016-12-30","value":2400600000},{"time":"2017-12-30","value":2780900000},{"time":"2018-12-30","value":2824100000},{"time":"2019-12-30","value":3128600000},{"time":"2020-12-30","value":2917800000},{"time":"2021-12-30","value":2819400000},{"time":"2022-12-30","value":2837300000},{"time":"2023-12-30","value":2918500000}],"Stockholders Equity":[{"time":"2014-12-30","value":1149900000},{"time":"2015-12-30","value":1179600000},{"time":"2016-12-30","value":1244900000},{"time":"2017-12-30","value":1495100000},{"time":"2018-12-30","value":1322000000},{"time":"2019-12-30","value":1446100000},{"time":"2020-12-30","value":1510200000},{"time":"2021-12-30","value":1485500000},{"time":"2022-12-30","value":1554200000},{"time":"2023-12-30","value":1716500000}],"ROE":[{"time":"2014-12-30","value":0.18210279154709105},{"time":"2015-12-30","value":0.20108511359782977},{"time":"2016-12-30","value":0.2006586874447747},{"time":"2017-12-30","value":0.18995384924085346},{"time":"2018-12-30","value":0.20922844175491678},{"time":"2019-12-30","value":0.21201853260493742},{"time":"2020-12-30","value":0.020990597271884518},{"time":"2021-12-30","value":0.010838101649276339},{"time":"2022-12-30","value":0.08126367262900527},{"time":"2023-12-30","value":0.0615787940576755}],"ROA":[{"time":"2014-12-30","value":0.15016696130426244},{"time":"2015-12-30","value":0.15196123251348634},{"time":"2016-12-30","value":0.15000416562526034},{"time":"2017-12-30","value":0.12607429249523536},{"time":"2018-12-30","value":0.13144010481215254},{"time":"2019-12-30","value":0.13590743463530014},{"time":"2020-12-30","value":0.004832407978614024},{"time":"2021-12-30","value":0.02138752926154501},{"time":"2022-12-30","value":0.06555528142952807},{"time":"2023-12-30","value":0.07377077265718691}]}

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.

Sector

10-Q
9/30/23
10-Q
6/30/23
10-Q
3/31/23
10-K
12/31/22
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9/30/22
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6/30/22
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3/31/22
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12/31/21
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9/30/21
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3/31/21
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12/31/20
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9/30/20
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3/31/20
10-K
12/31/19
10-Q
9/30/19
10-Q
6/30/19
10-Q
3/31/19
10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Hexcel Corp

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

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

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth -14%

Earnings Stability 29%

Competitiveness and MOAT

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.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

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%

What is the average Net Margin?

The average Net Margin over the past 5 years is +7.15%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -1.42%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +7.21%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -1.38%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +9.93%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -3.26%.

Safety & Stabiliy

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.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

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%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 4.62.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 0.48.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.08.

Growth

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.

Earnings growth has been increasing in past years.

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%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is -3.96%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +0.31%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -17.5%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +28.44%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +5.36%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +0.02%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is -8.9%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -13.39%.