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Looking at Hexcel Corporation's (NYSE:HXL) earnings update in December 2018, analyst consensus outlook appear conservative, with earnings growth rate expected to be 8.4% next year, which is within range of the past five-year average earnings growth of 8.3%. Currently with trailing-twelve-month earnings of US$277m, we can expect this to reach US$300m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
How will Hexcel perform in the near future?
The longer term expectations from the 13 analysts of HXL is tilted towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of HXL's earnings growth over these next few years.
By 2022, HXL's earnings should reach US$346m, from current levels of US$277m, resulting in an annual growth rate of 7.8%. EPS reaches $4.01 in the final year of forecast compared to the current $3.15 EPS today. In 2022, HXL's profit margin will have expanded from 13% to 13%.
Future outlook is only one aspect when you're building an investment case for a stock. For Hexcel, there are three fundamental aspects you should look at:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is Hexcel worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Hexcel is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Hexcel? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.