- UBS analyst Myles Walton upgraded Hexcel Corp HXL to Neutral from Sell with an unchanged price target of $52, implying an upside of 7%.
- The analyst notes the company's Q4 results were mixed as the operating performance was a bit below his expectations, but it still came in better than a much more conservative consensus.
- Hexcel shares now appear to be pricing in a balance of risks, Walton adds.
- Morgan Stanley analyst Kristine Liwag raised the price target to $57 (an upside of 17%) from $55 and maintained an Underweight rating on the shares.
- Recently, the company reported fourth-quarter sales growth of 21.8% year-over-year to $360.3 million, marginally beating the consensus of $359.4 million.
- Adjusted EPS improved to $0.16 from $(0.18) a year ago, beating the consensus of $0.13.
- Adjusted operating income improved to $25.2 million from $(6.1) million a year ago, and the margin recovered to 7% from -2.1%.
- The gross margin for the quarter was 19.2% compared to 10.3% a year ago.
- Segment sales: Commercial Aerospace $199.7 million (+57.6% Y/Y); Space & Defense $105.9 million (-11.5% Y/Y); Industrial of $54.7 million (+10.7%Y/Y)
- Net cash generated from operating activities for 2021 was $151.7 million, compared to $264.3 million for 2020.
- The company declared a quarterly dividend of $0.10 per share payable on February 18, 2022, to stockholders of record as of February 11, 2022.
- FY22 Guidance: Hexcel expects sales of $1.50 billion - $1.63 billion (consensus $1.62 billion), Adjusted EPS of $1.00 - $1.24 (consensus $1.27).
- Price Action: HXL shares traded lower by 1.59% at $48.52 on the last check Friday.
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