Textron (TXT) AI Stock Analysis

• Market Cap: $12.81B
• Dividend Yield: 0.11%
• Average Volume (3M): 1.38M
• Price to Earnings (P/E): 16.2
• Beta (1Y): 0.86
• Revenue Growth: 0.14%
• EPS Growth: -5.38%
• Country: US
• Employees: 34,000
• Sector: Industrials
• Sector Strength: 66
• Industry: Aerospace & Defense
• EPS (TTM): 4.32
• Shares Outstanding: 181,620,910
• 10 Day Avg. Volume: 1,378,867
• 30 Day Avg. Volume: 1,383,395
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.94
• Price to Cash Flow (P/CF): 7.20
• P/FCF Ratio: 10.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $92.45
• Price Target Upside: 27.75% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

Textron's overall score reflects a balance of strengths and challenges. The company's solid financial health is tempered by mixed profitability and declining cash flow. While technical indicators suggest bearish momentum, the valuation appears fair. The earnings call and corporate events indicate both opportunities and challenges, with strategic board changes and restructuring efforts underway.

Positive Factors

Aviation Demand

Aviation demand remained positive with book to bill above 1x and backlog up ~3% sequentially.

Valuation

Analyst sees attractive risk/reward with Textron shares trading at a 40% discount to peers.

Negative Factors

Industrial Segment Challenges

Industrial segment facing challenges with a strategic review and production pause leading to a significant drop in sales.

Investor Sentiment

Investor interest in the stock and business jets remains limited as investors point to secondary market inventories coming off lows and the potential for slowing orders.

Textron Business Overview & Revenue Model

Company Description

Textron Inc. is a multi-industry company that operates in various sectors including aerospace, defense, and industrial. The company is known for its diverse portfolio of products and services, which include aircraft and defense systems, automotive fuel systems, tools, and test equipment. Textron's major brands include Bell Helicopter, Cessna, Beechcraft, and Lycoming Engines, among others. These brands are renowned for their innovative solutions and high-quality products that cater to both commercial and military markets.

How the Company Makes Money

Textron makes money through a diversified revenue model that encompasses several key streams. The primary source of revenue is from the sale of aircraft and related services, particularly through its Bell and Textron Aviation segments which include Cessna and Beechcraft aircraft. Defense contracts also play a significant role in its revenue, with Textron Systems providing advanced military technologies and solutions. Additionally, its Industrial segment, which includes brands like Kautex and E-Z-GO, generates revenue through the sale of automotive components and specialized vehicles. Textron also benefits from aftermarket services, which provide ongoing maintenance and support for its products. Significant partnerships with government agencies and defense organizations further bolster its earnings by securing long-term contracts and collaborations.

Textron Financial Statement Overview

Summary

Textron exhibits solid financial health with stable revenue and a good equity position. The profitability is mixed with high gross margins but challenges in EBIT. Cash flow shows strong operating cash generation but declining free cash flow, indicating areas for improvement in cash management.

Income Statement

Textron showed a slight increase in revenue from $13.68 billion to $13.70 billion in TTM, indicating stability. However, gross profit margin improved significantly from 16.64% to 38.05%, while the net profit margin slightly decreased to 6.01% from 6.73% last year. Notably, EBIT turned negative in TTM, reducing EBIT margin significantly, although EBITDA margin remained positive at 9.63%.

Balance Sheet

The company maintains a healthy equity position with an equity ratio of 42.79% in TTM, and a reduced debt-to-equity ratio of 0.40 from 0.55 the previous year. ROE slightly declined to 11.44% from 13.18%, reflecting stable shareholder returns despite some challenges.

Cash Flow

Free cash flow decreased by 24.54% in the TTM period. The operating cash flow to net income ratio is healthy at 1.23, indicating good cash generation relative to net income. However, the reduction in free cash flow signals potential cash management challenges.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Mar 2022	Mar 2021
Income Statement		Total Revenue
13.70B	13.68B	12.87B	12.38B	11.65B
	Gross Profit
2.50B	2.28B	2.07B	2.08B	1.56B
	EBIT
825.00M	1.05B	1.12B	1.02B	595.00M
	EBITDA
1.42B	1.56B	1.51B	1.39B	827.00M
	Net Income Common Stockholders
824.00M	921.00M	861.00M	746.00M	309.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.39B	2.18B	1.96B	1.92B	2.15B
	Total Assets
16.84B	16.86B	16.29B	15.83B	15.40B
	Total Debt
3.25B	3.87B	3.18B	3.19B	3.71B
	Net Debt
1.86B	1.69B	1.22B	1.26B	1.56B
	Total Liabilities
9.63B	9.87B	9.18B	9.01B	9.55B
	Stockholders Equity
7.20B	6.99B	7.11B	6.82B	5.84B
Cash Flow		Free Cash Flow
650.00M	864.00M	1.14B	1.22B	452.00M
	Operating Cash Flow
1.01B	1.27B	1.49B	1.60B	769.00M
	Investing Cash Flow
-284.00M	-317.00M	-447.00M	-281.00M	-248.00M
	Financing Cash Flow
-1.45B	-813.00M	-1.09B	-1.45B	360.00M

Textron Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 72.37
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TXT, the sentiment is Negative. The current price of 72.37 is below the 20-day moving average (MA) of 73.18, below the 50-day MA of 75.49, and below the 200-day MA of 83.85, indicating a bearish trend. The MACD of -1.03 indicates Negative momentum. The RSI at 43.01 is Neutral, neither overbought nor oversold. The STOCH value of 31.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TXT.

Textron Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NOC	79 Outperform	$67.14B	16.37	27.75%	1.74%	4.44%	110.33%
RTX	77 Outperform	$171.44B	36.22	7.96%	1.96%	17.15%	58.66%
GD	75 Outperform	$67.80B	18.40	17.44%	2.26%	12.88%	13.78%
LMT	74 Outperform	$105.65B	20.12	81.04%	2.84%	5.14%	-19.14%
TXT	64 Neutral	$12.81B	16.21	11.63%	0.11%	0.14%	-5.38%
Sector *	62 Neutral	$8.11B	13.34	1.17%	3.02%	4.16%	-15.14%
BA	37 Underperform	$119.19B	―	-162.23%	―	-14.49%	-399.90%

Textron Corporate Events

Textron Appoints Rob Mionis to Board of Directors

On February 26, 2025, Textron Inc. announced the election of Rob Mionis to its Board of Directors, effective March 1, 2025. Mionis, who is the President and CEO of Celestica Inc., brings extensive experience in aerospace and industrial markets, having previously held leadership roles at StandardAero and Honeywell. This strategic addition to the board is expected to enhance Textron’s capabilities in these sectors. Mionis will serve on Textron’s Audit Committee and Organization and Compensation Committee, potentially influencing the company’s governance and operational strategies.

Textron Restructures Amid Soft Demand for TSV Products

Textron Inc. is pausing production of its TSV powersports products due to soft consumer demand and is exploring strategic alternatives for this line. This decision is part of a broader restructuring plan leading to increased pretax special charges and an inventory valuation charge, impacting the company’s financials for 2024 and leading to expected completion of restructuring actions by the first half of 2025.