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Hexcel Corporation
$7.2B
Market Cap
53.9
P/E
2.06
PEG
7.7%
ROCE
7.9%
ROE
0.82
D/E
10.8%
OPM
-18.4%
% from 52W High
72
α RS
🔍 HXL is showing a notable setup because Sector RRG has Industrials in the Improving quadrant with the trail still strengthening and RS Rating is 72. Net: Partial signal stack, not a recommendation. ? RRG RS Rating
Sources
Industrials in Improving quadrant · RS Rating 72
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About

Hexcel Corporation develops, manufactures, and markets advanced lightweight composites technology. It operates through two segments, Composite Materials and Engineered Products. The company offers carbon fiber, reinforcements, prepregs and other fiber-reinforced matrix materials, honeycomb, resins, engineered core and composite structures for use in commercial aerospace, defense and space, and industrial applications. The Composite Materials segment manufactures and markets carbon fibers, fabrics, multi-axials, 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 aircraft, transportation, recreational products, and other industrial applications. 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 marketing 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.

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📊 MIXED Hexcel Q1 2026 sales $502M, +10% YoY; commercial aerospace up 18.8%
Revenue & Profitability
First quarter 2026 revenue was $502 million, up 8.8% in constant currency (10% reported) year-over-year. Adjusted earnings per share were $0.59. Gross margin improved to 26.9% from 22.4% in the prior year, driven by volume, mix, and price. Adjusted operating income was $68 million (13.5% of sales), compared to $45 million (9.9%) last year. Free cash flow was a use of $6 million, significantly better than the $55 million use in Q1 2025. Net debt to adjusted EBITDA stood at 2.6x.
Outlook
Management expects commercial aerospace production rates to continue recovering, with A350 volumes likely reaching 80 units or slightly higher, A320 at the low end of low-700s, 737 MAX exceeding mid-400s, and 787 at 90-100 units. Defense spending trends are positive, with increased budgets for missiles and rotorcraft, though space launcher and rocket motor volumes were softer in Q1. The company reaffirmed full-year 2026 guidance of adjusted EPS $2.10-$2.30, with roughly equal splits between the first and second halves. Risks include the Middle East conflict, higher oil prices, and potential faster customer rate ramps.
Growth Drivers
Key growth levers include the commercial aerospace ramp across all four major programs (A350, A320, 787, 737 MAX), with particular strength in Boeing platforms year-over-year. Defense growth is expected from missiles, European fighter programs (Rafale, Typhoon), and U.S./European military rotorcraft (CH-53K, Black Hawk). Higher jet fuel prices reinforce the need for fuel efficiency and light-weighting, benefiting Hexcel's composites. Pricing on contract renewals (15-20% of contracts annually) and increased capacity utilization also drive growth.
Balance Sheet & CapEx
Capital expenditures on an accrual basis were $18 million in Q1 2026, compared to $17 million in Q1 2025. The company is bringing mothballed carbon fiber lines back online to support increasing production rates; one line was brought online in late 2025, and another is planned for 2026. Hexcel plans to hire approximately 400 direct labor employees for the year, with about 200 hired in Q1. The company refinanced its $750 million revolver in March, extending maturity to 2031, to enhance medium-term liquidity.
Margins
Gross margin improved to 26.9% in Q1 2026 from 22.4% a year ago, driven by higher volume, favorable mix, price realization, and a non-recurring benefit from lower-cost inventory sold. Operating margin was 13.5%, up from 9.9%, despite an 80 basis point headwind from foreign exchange. The company expects operating leverage to continue as production rates increase and capacity utilization improves, though startup costs from new lines and hiring will phase in. Full-year guidance implies margins broadly consistent with Q1, with some seasonal variation.
Key Risks
Management highlighted several risks: the Middle East conflict and higher oil prices could increase feedstock, energy, and logistics costs, though these are partially mitigated by hedging and long-term contracts. The A320 engine availability issue is pressuring volumes to the low end of guidance. Foreign exchange is a headwind (80 bps in Q1). Other risks include startup costs for new carbon fiber lines, lumpy defense funding, and potential trade or oil uncertainty. Faster customer rate ramps could become a tailwind but are uncertain.
Generated by AI · Q1 2026 results · Not investment advice
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✓ 📞 Earnings Call Transcripts (5 quarters) submit a missing quarter
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📞 Earnings Call Transcripts (5)
Q2 2026 Q2 2026 2026-07-30
Q2 2026 saw 8% sales growth and margin expansion, led by commercial aerospace, while defense and space remained stable. Guidance for 2026 was raised, with strong operating leverage, improved cash flow, and continued focus on debt reduction and disciplined capital allocation.
Q1 2026 Q1 2026 2026-04-23
Q1 2026 saw 10% sales growth and margin expansion, led by commercial aerospace recovery and strong operating leverage. Full-year guidance is reaffirmed, with risks from oil prices and geopolitical uncertainty mitigated by hedging and disciplined execution.
Q4 2025 Q4 2025 2026-01-29
Commercial aerospace and defense demand are driving growth, with 2025 sales of $1.894B and a strong Q4. 2026 guidance projects $2.0–$2.1B in sales and margin expansion, supported by operating leverage and cost control.
Q3 2025 Q3 2025 2025-10-23
Q3 2025 sales were $456 million with EPS of $0.37, as commercial aerospace declined but defense and space grew. Guidance was lowered due to destocking and tariffs, but the company expects strong growth in 2026, supported by a $600 million share repurchase and $1 billion free cash flow forecast.
Q2 2025 Q2 2025 2025-07-25
Q2 2025 saw $490M in sales and $0.50 EPS, with commercial aerospace down 8.9% year-over-year due to A350 destocking, but defense sales up 7.6%. Guidance is reaffirmed, with strong H2 2025 expected as production rates rise and supply chain issues ease.
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Financial Model
Projections are built from each company's audited annual financials (Income Statement, Balance Sheet, Cash Flow) over the last 5 fiscal years. Forward assumptions — revenue growth %, EBITDA margin, D&A (USD millions), interest expense, tax rate, and capex — are AI-generated using historical context and refreshed twice a year: after the December results season and after the September/Q4 results season.

DCF Valuation
Fair Value = Σ(FCFt / (1+WACC)t) + Terminal Value. Terminal Value uses the Gordon Growth Model: FCF5 × (1+g) / (WACC−g). Default WACC: 10% (US risk-free ~4.5%, equity risk premium ~5.5%). Default terminal growth: 3% (long-run US nominal GDP proxy).

CAGR Tracker
Expected 5-year CAGR = (DCF Fair Value / Current Price)1/5 − 1. Assumes fair value is reached in exactly 5 years — a mechanical estimate only.

Data Sources & Limitations
Financial statements sourced from public filings. Prices updated daily. Forward assumptions are AI-generated. All monetary values in USD millions. Non-US ADR companies may have currency conversion inaccuracies. Models are point-in-time and do not update intra-quarter or account for M&A, macro shocks, or extraordinary items.

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