Is Hexcel Corp. overvalued or undervalued?

As of 18 February 2025, the valuation grade for Hexcel Corp. has moved from very expensive to expensive, indicating a slight improvement in perceived value but still reflecting high valuation concerns. The company is currently considered overvalued. Key ratios include a P/E ratio of 35, an EV to EBITDA of 19.31, and a PEG ratio of 0.31, which suggests that while growth expectations are low, the current price remains elevated compared to earnings.
In comparison to peers, Hexcel Corp. has a higher P/E ratio than Teledyne Technologies, Inc. at 26.81 and Leidos Holdings, Inc. at 14.21, both of which are rated fairly and attractively, respectively. Despite a strong dividend yield of 66.33%, the company's return metrics, such as ROCE at 10.05% and ROE at 11.15%, do not justify its premium valuation. Over the past year, Hexcel has underperformed the S&P 500, with a return of -15.54% compared to the index's 10.26%, further reinforcing the view that the stock is overvalued.