|
Related Topics
|
|
Category: Stock Market and Hexcel
Date: 22 October 2019 Stock Price: $74.76 We take a look at the latest earnings report for the 3rd quarter of their 2019 financial year of Hexcel Corporation, a leading manufacturer and supplier of advanced composites including carbon fibre.
|
|
About Hexcel Corporation
Hexcel Corporation is a leading advanced composites company. It develops, manufactures and markets lightweight, high-performance structural materials, including carbon fibers, specialty reinforcements, prepregs and other fiber-reinforced matrix materials, honeycomb, adhesives, engineered core and composite structures, used in commercial aerospace, space and defense and industrial applications.
2018 also saw the first delivery by Airbus of the A350-1000 to Qatar Airways. We are
the leading supplier of advanced composite materials for the A350 XWB program,
and those composites make a significant contribution to weight savings, performance,
fuel efficiency and cabin comfort. Strong global demand for new aircraft is reflected
in a backlog between Airbus and Boeing for more than 13,000 aircraft that is worth
roughly $10 billion to our company.
Financial overview of Hexcel's 3rd quarter 2019 earnings report
The numbers below refers to the latest quarter unless specified otherwise
- Net sales: $572.5 million (up from $540.5 million for the same quarter of the previous year)
- Cost of sales: $414.6 million (up from $397.5 million for the same quarter of the previous year)
- Net Income: $80.3 million (up from $80.1 million for the same quarter of the previous year)
- Diluted earnings per share: $0.93 (up from $0.91 for the same quarter of the previous year)
- Weighted average number of shares - diluted: 86.1 million (down from 88.1 million for the same quarter of the previous year)
- Cash and cash equivalents: $47 million
- Cash and cash equivalents per share: $0.55
- Cash and cash equivalents makes up 0.73% of Hexcel's market capital
- Cash and cash equivalents makes up 1.48% of Hexcel's total assets
- Inventories: $352.2 million
- Inventories makes up 11.16% of Hexcel's total assets
- Stockholders' equity in Hexcel : $1.417 billion
- Stockholders equity per share: $16.46
- So Hexcel is trading at 4.54 times its stockholders equity per share, which is well outside the expected range of between 2 and 4 times that most firms tend to trade at.
- Cash generated from operations (for 9 months): $277 million
- Cash generated from operations per share (for 9 months): $3.21
Hexcel Corporation's'management commentary on the earnings and fiscal guidance
STAMFORD, Conn. October 21, 2019 – Hexcel Corporation (NYSE: HXL) today reported third quarter 2019 results including net sales of $572.5 million and adjusted diluted EPS of $0.90. Nick Stanage, Chairman, CEO and President said: “Hexcel delivered 90 cents of adjusted diluted EPS, or growth of 12.5% compared to the third quarter of 2018. I’m especially pleased with our teams’ performance, delivering strong leverage and a 19.2% operating margin. These strong results reflect our relentless focus on continuous improvement and Operational Excellence.
Our generation of Cash from Operations continued to be strong and is now $277 million YTD. As we look forward, we see further growth in our markets, tempered by the extended uncertainty for the timing of the Boeing 737 MAX return to service, which is pushing a portion of our growth originally expected in 2019 into future periods. As a result of this, combined with the continued strong dollar FX impact, we are reducing our 2019 sales guidance while maintaining our 2019 guidance for EPS, capital expenditures and free cash flow. Despite the market uncertainty related to the 737 MAX recertification timing, we are confident on delivering earnings and cash flow in line with our annual guidance and continuing to drive strong shareholder value.”
2019 Guidance
Our generation of Cash from Operations continued to be strong and is now $277 million YTD. As we look forward, we see further growth in our markets, tempered by the extended uncertainty for the timing of the Boeing 737 MAX return to service, which is pushing a portion of our growth originally expected in 2019 into future periods. As a result of this, combined with the continued strong dollar FX impact, we are reducing our 2019 sales guidance while maintaining our 2019 guidance for EPS, capital expenditures and free cash flow. Despite the market uncertainty related to the 737 MAX recertification timing, we are confident on delivering earnings and cash flow in line with our annual guidance and continuing to drive strong shareholder value.”
2019 Guidance
- Sales of $2.340 billion to $2.400 billion (previously $2.375 billion to $2.475 billion)
- Adjusted diluted earnings per share of $3.43 to $3.53 (unchanged)
- Free cash flow greater than $250 million (unchanged)
- Accrual basis capital expenditures of $170 million to $190 million (unchanged)
Hexcel Corporation (NYSE:HXL) stock price history
The image below obtained from Google shows the stock price history of Hexcel Corporation (NYSE: HXL) for the last 5 years. 5 years ago the stock of Hexcel was trading at around $40 and its currently trading at $74.76 a stock. That's a return of 86.9% provided to Hexcel stockholders over the last 5 years.
The stock of Hexcel is trading at a lot closer to its 52 week high of $87 than it is to its 52 week low of $53.50, which to us is a clear indication that the short term sentiment and momentum of Hexcel Corporation's stock is positive.
The stock of Hexcel is trading at a lot closer to its 52 week high of $87 than it is to its 52 week low of $53.50, which to us is a clear indication that the short term sentiment and momentum of Hexcel Corporation's stock is positive.
Hexcel Corporation( NYSE: HXL) stock price history over the last 5 years
Recent coverage of Hexcel Corporation
The extract regarding Hexcel Corporation was obtained from TheStreet.com
Shares of aerospace and defense contractor Hexcel (HXL - Get Report) dived Tuesday after a steep downgrade of its stock by a top analyst. Hexcel's stock price plunged 4.06% to $78.80 after Bank of America analysts lowered their rating on the company's stock by two levels to underperform from buy. BofA also slashed its price target on Hexcel's stock, knocking it down to $80 a share, only slightly above its current trading levels, from $95 previously. BofA analysts cited Hexcel's exposure to Boeing's 787 amid "lackluster orders" for the Dreamliner. Hexcel, which produces lightweight, composite materials used in aircraft production, is a major supplier for both Boeing and the 787. The analysts forecast "limited upside" for Hexcel in 2021 and limited growth over the next few years amid what BofA is calling the "weakest aircraft order environment since 2009," according to a report from Bloomberg.
Read the full article here
Shares of aerospace and defense contractor Hexcel (HXL - Get Report) dived Tuesday after a steep downgrade of its stock by a top analyst. Hexcel's stock price plunged 4.06% to $78.80 after Bank of America analysts lowered their rating on the company's stock by two levels to underperform from buy. BofA also slashed its price target on Hexcel's stock, knocking it down to $80 a share, only slightly above its current trading levels, from $95 previously. BofA analysts cited Hexcel's exposure to Boeing's 787 amid "lackluster orders" for the Dreamliner. Hexcel, which produces lightweight, composite materials used in aircraft production, is a major supplier for both Boeing and the 787. The analysts forecast "limited upside" for Hexcel in 2021 and limited growth over the next few years amid what BofA is calling the "weakest aircraft order environment since 2009," according to a report from Bloomberg.
Read the full article here
Hexcel Corporation (NYSE:HXL) stock valuation
Based on Hexcel's latest earnings report and their outlook our valuation model provides a target (full value) price at $61.40 per Hexcel stock.We therefore believe the stock of Hexcel Corporation is overvalued.
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $61.40. We therefore believe a good entry point into Hexcel Corporation stock is at $55.30 or below. We believe the stock of Hexcel will pull back from current levels to levels closer to our target (full value) price for Hexcel Corporation.
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $61.40. We therefore believe a good entry point into Hexcel Corporation stock is at $55.30 or below. We believe the stock of Hexcel will pull back from current levels to levels closer to our target (full value) price for Hexcel Corporation.