HXL
Hexcel Corporation
$86.19
Platform & Compounding FCF
70%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 34.0% below fair value
You pay
$86.19
Bear
$70.31
Fair
$130.57
Bull
$203.55
Bear
$70.31
-18.4%
11% stage 1 growth, 11% discount
Fair
$130.57
+51.5%
18% stage 1 growth, 11% discount
Bull
$203.55
+136.2%
24% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (18% base case)
Terminal Value % of EV
45%
Implied Market Multiple
25.0x
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 $90.25 from 36 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $130.57 per share.
Warnings
Wall Street's average price target is $90.25 (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