HXL
Hexcel Corporation
$99.15
Platform & Compounding FCF
70%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 25.2% below fair value
You pay
$99.15
Bear
$71.01
Fair
$132.61
Bull
$207.59
Bear
$71.01
-28.4%
11% stage 1 growth, 11% discount
Fair
$132.61
+33.7%
19% stage 1 growth, 11% discount
Bull
$207.59
+109.4%
24% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (19% base case)
Terminal Value % of EV
45%
Implied Market Multiple
28.3x
Market is pricing in (growth)
13.7%
vs 18.7% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $91.50 from 36 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $132.61 per share.
Warnings
Wall Street's average price target is $91.50 (from 36 analysts). Our estimate is 64% above the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions