Hexcel Corp

Hexcel Corp (HXL - Snapshot Report) is coming off of yet another strong quarter. Earnings were higher than expected and resulted in the company raising its full-year outlook.

Shares are a Zacks #1 Rank (Strong Buy) and the recent market turmoil has left a very nice buying opportunity.

Company Description

Hexcel Corp makes composites for lightweight, high-performance structural materials. Their products are used in for aerospace and industrials applications.

Another Strong Quarter

Hexcel reported second-quarter results on Jul 25 that included a 16% increase in the top line, to $354 million. Net income surged 62% to $37.4 million. Earnings came in at $0.32 per share, 4 cents higher than expected. This was the company's sixth earnings surprise in the past 7 quarters. They met expectations 3 quarters ago.

Management said that strong commercial aerospace build rates helped drive the solid quarter. They went on to raise full-year guidance as well.

Estimates on the Rise

After unanimous upward revisions, the full-year consensus for 2011 is up 7 cents to $1.11. Next year's average projection is up 6 cents, to $1.32.

Last year Hexcel made $0.78 per share, putting current expected growth rates at 42% and 19%, respectively. Given the analysts have a propensity to raise throughout the year those rates should end up being higher in actuality.

Valuations Picture

Shares of HXL are not going to impress anyone with their valuations, but they are not bad. The forward P/E is about 21 times and that puts the PEG near 1.4. HXL is going for 1.8 times sales and about 3 times book value.

The Chart

After the earnings news the market wanted to push HXL higher, but the weight of the debt worries kept shares from gaining traction. Once the debt ceiling is figured out investors should be buying on the earnings news, so this could be a nice buying opportunity.

Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service

Read the full analyst report on HXL