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1. Company Snapshot

1.a. Company Description

Hexcel Corporation, together with its subsidiaries, develops, manufactures, and markets structural materials for use in commercial aerospace, space and defense, and industrial markets.It operates through two segments, Composite Materials and Engineered Products.The Composite Materials segment manufactures and markets carbon fibers, fabrics and specialty reinforcements, prepregs and other fiber-reinforced matrix materials, structural adhesives, honeycomb, 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 trains.


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.The company sells its products directly through its managers, product managers, and sales personnel, as well as through independent distributors and manufacturer representatives in the Americas, Europe, the Asia Pacific, India, and Africa.Hexcel Corporation was founded in 1946 and is headquartered in Stamford, Connecticut.

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1.b. Last Insights on HXL

Hexcel Corporation's recent performance was driven by strong Q4 2025 earnings and revenue beat, surpassing Zacks Consensus Estimate of $0.5 per share. The company reported Q4 2025 sales of $491 million, a 4% increase from Q4 2024. Additionally, Hexcel's Q4 2025 adjusted diluted EPS of $0.52, compared to Q4 2024 adjusted diluted EPS of $0.52, indicates stable profitability. Rising aerospace sales and improved operating income also contributed to the company's strong performance.

1.c. Company Highlights

2. Hexcel Corporation's 2025 Earnings Report: A Strong Foundation for Growth

Hexcel Corporation reported full-year 2025 sales of $1.894 billion, adjusted EPS of $1.76, and free cash flow of $157 million. The company's fourth-quarter 2025 sales were $491 million, a 1.6% increase in constant currency, driven by growth in the commercial aerospace market. Adjusted operating income in the fourth quarter was $65 million or 13.3% of sales, up from $57 million or 12.1% of sales in the comparable prior year period. The actual EPS for the quarter came out at $0.52, slightly beating estimates of $0.5.

Publication Date: Feb -09

📋 Highlights
  • 2025 Financial Performance:: Full-year sales reached $1.894 billion, adjusted EPS of $1.76, and free cash flow of $157 million, despite challenges like Airbus schedule changes and destocking.
  • 2026 Guidance:: Projects sales of $2.0–$2.1 billion, adjusted EPS of $2.10–$2.30, and free cash flow >$195 million, with 8% revenue growth driven by commercial aerospace and defense segments.
  • Commercial Aerospace Growth:: A350 production to increase from 57 units in 2025 to 80 in 2026, with A320, MAX, and 787 programs also contributing to low-to-mid-double-digit growth.
  • Debt Reduction Strategy:: Leverage ratio of 2.7x at year-end 2025, aiming to reduce to 1.5–2.0x by 2026, with revolver repayment prioritized to lower interest expenses.
  • Margin Expansion Target:: Path to 18% operating margins by 2030 via production rate increases, cost discipline, and productivity initiatives, supported by mid-30% incremental margins in 2026.

Financial Performance

The company's financial performance was impacted by Airbus-initiated schedule changes on the A350 program, destocking by OEMs, and charges related to the disposition of non-core businesses. Despite these challenges, Hexcel achieved a lower effective tax rate in 2025, which contributed to the adjusted EPS. Adjusted EBITDA totaled $346 million in 2025, down from $382 million in 2024. Free cash flow in 2025 was $157 million, compared to $203 million in 2024, due to strong sales in December leading to an increase in accounts receivable.

Guidance and Outlook

Looking ahead to 2026, Hexcel expects sales in the range of $2.0 billion to $2.1 billion, adjusted EPS between $2.10 and $2.30, and free cash flow greater than $195 million. The company is confident in its ability to deliver value for customers and shareholders, driven by positive order trends and the catalyst enabling increased commercial aircraft production. As Thomas Gentile mentioned, "the commercial recovery is gaining traction as OEMs take steps toward higher production rates across all key programs."

Valuation Metrics

With a P/E Ratio of 60.45, P/B Ratio of 5.29, and EV/EBITDA of 29.54, Hexcel's valuation metrics indicate a premium valuation. The company's Net Debt / EBITDA ratio of 3.51x is relatively high, but it is expected to reduce leverage to 1.5-2.0x by the end of 2026. Analysts estimate next year's revenue growth at 11.0%, which may justify the premium valuation. However, investors should closely monitor the company's ability to execute on its growth initiatives and deliver on its guidance.

Growth Initiatives

Hexcel is focused on ramping up production rates to generate operating leverage, with a priority on executing on this initiative laser-focused and delivering quality and safety to its customers. The company is also pushing hard on defense, which is about 35% of its current business and growing in various markets. As Thomas Gentile stated, "we believe we can play a big part in this area and grow our business." With a strong foundation in place, Hexcel is well-positioned to capitalize on the growing demand in the aerospace and defense markets.

3. NewsRoom

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Channing Capital Management LLC Has $83.68 Million Stock Holdings in Hexcel Corporation $HXL

Feb -22

Source: defenseworld.net

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Hexcel Now 23% of This Portfolio After $7.5 Million Buy and 32% Stock Surge

Feb -19

Source: fool.com

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Rocket Lab (NASDAQ:RKLB) vs. Hexcel (NYSE:HXL) Financial Analysis

Feb -17

Source: defenseworld.net

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Envestnet Asset Management Inc. Sells 13,929 Shares of Hexcel Corporation $HXL

Feb -11

Source: defenseworld.net

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Hexcel Corporation: Expect Earnings To Ramp Aggressively In FY 2026

Feb -05

Source: seekingalpha.com

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Harbor SMID Cap Core ETF Q4 2025 Contributors And Detractors

Feb -05

Source: seekingalpha.com

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Hexcel (HXL) Q4 Earnings: Taking a Look at Key Metrics Versus Estimates

Feb -02

Source: zacks.com

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Hexcel (NYSE:HXL) Sets New 12-Month High on Earnings Beat

Jan -30

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.35%)

6. Segments

Composite Materials

Expected Growth: 8%

Hexcel Corporation's Composite Materials segment growth is driven by increasing demand for lightweight materials in commercial aerospace, defense, and industrial markets. The company's innovative products, such as carbon fiber and honeycomb materials, are used in aircraft, wind turbines, and automotive applications, contributing to the segment's 8% growth.

Engineered Products

Expected Growth: 10%

Hexcel's Engineered Products segment growth is driven by increasing demand for lightweight composite materials in aerospace and industrial markets, driven by trends towards fuel efficiency, sustainability, and electrification. Additionally, the company's innovative products and strategic partnerships with major OEMs, such as Boeing and Airbus, contribute to its growth momentum.

7. Detailed Products

Carbon Fiber

High-performance carbon fibers used in aerospace, industrial, and recreational applications

Reinforcements

Woven and non-woven fabrics, tapes, and prepregs used in composite manufacturing

Structural Materials

Composite materials for aerospace, industrial, and recreational applications

Adhesives and Coatings

Epoxy and acrylic-based adhesives, coatings, and surface treatments for composite bonding and protection

Composite Tooling

Molds and tooling systems for composite part production

HexPly Prepregs

Pre-impregnated composite materials for aerospace, industrial, and recreational applications

8. Hexcel Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Hexcel Corporation is medium due to the availability of alternative materials and products in the market.

Bargaining Power Of Customers

The bargaining power of customers for Hexcel Corporation is low due to the company's strong brand reputation and the lack of price sensitivity among its customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Hexcel Corporation is medium due to the presence of multiple suppliers in the market, but the company's large scale of operations gives it some bargaining power.

Threat Of New Entrants

The threat of new entrants for Hexcel Corporation is low due to the high barriers to entry in the industry, including the need for significant capital investment and technical expertise.

Intensity Of Rivalry

The intensity of rivalry for Hexcel Corporation is high due to the presence of several established players in the market, leading to intense competition and pricing pressure.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 28.95%
Debt Cost 5.46%
Equity Weight 71.05%
Equity Cost 10.20%
WACC 8.83%
Leverage 40.75%

11. Quality Control: Hexcel Corporation passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Spirit AeroSystems

A-Score: 5.0/10

Value: 9.6

Growth: 1.1

Quality: 5.2

Yield: 0.0

Momentum: 7.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
AeroVironment

A-Score: 5.0/10

Value: 6.9

Growth: 6.1

Quality: 4.8

Yield: 0.0

Momentum: 9.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Kratos Defense

A-Score: 4.5/10

Value: 2.4

Growth: 5.2

Quality: 5.9

Yield: 0.0

Momentum: 10.0

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Hexcel

A-Score: 4.3/10

Value: 1.6

Growth: 4.3

Quality: 4.3

Yield: 1.0

Momentum: 7.5

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Rocket Lab USA

A-Score: 4.2/10

Value: 6.0

Growth: 4.6

Quality: 3.9

Yield: 0.0

Momentum: 9.5

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
Leonardo DRS

A-Score: 4.1/10

Value: 2.3

Growth: 3.7

Quality: 6.2

Yield: 1.0

Momentum: 5.5

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

89.94$

Current Price

89.94$

Potential

-0.00%

Expected Cash-Flows