What's Next: Hexcel's Earnings Preview

Hexcel HXL is gearing up to announce its quarterly earnings on Monday, 2024-10-21. Here's a quick overview of what investors should know before the release.

Analysts are estimating that Hexcel will report an earnings per share (EPS) of $0.47.

The market awaits Hexcel's announcement, with hopes high for news of surpassing estimates and providing upbeat guidance for the next quarter.

It's important for new investors to understand that guidance can be a significant driver of stock prices.

Earnings Track Record

In the previous earnings release, the company beat EPS by $0.04, leading to a 0.26% increase in the share price the following trading session.

Here's a look at Hexcel's past performance and the resulting price change:

Tracking Hexcel's Stock Performance

Shares of Hexcel were trading at $62.25 as of October 17. Over the last 52-week period, shares are down 4.35%. Given that these returns are generally negative, long-term shareholders are likely bearish going into this earnings release.

Analyst Views on Hexcel

For investors, staying informed about market sentiments and expectations in the industry is paramount. This analysis provides an exploration of the latest insights on Hexcel.

The consensus rating for Hexcel is Neutral, derived from 6 analyst ratings. An average one-year price target of $67.0 implies a potential 7.63% upside.

Analyzing Ratings Among Peers

The analysis below examines the analyst ratings and average 1-year price targets of Rocket Lab USA and AeroVironment, three significant industry players, providing valuable insights into their relative performance expectations and market positioning.

• Rocket Lab USA received a Outperform consensus from analysts, with an average 1-year price target of $7.12, implying a potential 88.56% downside.
• AeroVironment is maintaining an Outperform status according to analysts, with an average 1-year price target of $224.0, indicating a potential 259.84% upside.

Comprehensive Peer Analysis Summary

Within the peer analysis summary, vital metrics for Rocket Lab USA and AeroVironment are presented, shedding light on their respective standings within the industry and offering valuable insights into their market positions and comparative performance.

Key Takeaway:

Hexcel is positioned in the middle among its peers for consensus rating. It ranks at the top for revenue growth, indicating strong performance in this area. In terms of gross profit, Hexcel is at the bottom compared to its peers. However, for return on equity, Hexcel is in the middle range. Overall, Hexcel shows competitive revenue growth but needs improvement in gross profit to align with its peers.

Unveiling the Story Behind Hexcel

Founded in 1948, Hexcel designs and manufactures a range of highly engineered composite fibers, fabrics, resins, and structures for use in commercial aerospace, defense, and other industrial markets. These are lighter than metal and perform under rigorous conditions in aircraft frames, wings, engines, and other components and subassemblies. The company's name derives from the six-sided honeycomb structures that lend many of its products their light weight and rigidity. Hexcel's biggest customers are Airbus (38% of 2022 sales) and Boeing (25% of prepandemic sales) and its respective subcontractors.

Financial Milestones: Hexcel's Journey

Market Capitalization Analysis: Below industry benchmarks, the company's market capitalization reflects a smaller scale relative to peers. This could be attributed to factors such as growth expectations or operational capacity.

Positive Revenue Trend: Examining Hexcel's financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 10.15% as of 30 June, 2024, showcasing a substantial increase in top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Industrials sector.

Net Margin: The company's net margin is a standout performer, exceeding industry averages. With an impressive net margin of 9.99%, the company showcases strong profitability and effective cost control.

Return on Equity (ROE): Hexcel's ROE lags behind industry averages, suggesting challenges in maximizing returns on equity capital. With an ROE of 3.12%, the company may face hurdles in achieving optimal financial performance.

Return on Assets (ROA): Hexcel's ROA stands out, surpassing industry averages. With an impressive ROA of 1.77%, the company demonstrates effective utilization of assets and strong financial performance.

Debt Management: With a below-average debt-to-equity ratio of 0.51, Hexcel adopts a prudent financial strategy, indicating a balanced approach to debt management.

To track all earnings releases for Hexcel visit their earnings calendar on our site.

This article was generated by Benzinga's automated content engine and reviewed by an editor.