Textron (TXT) AI Stock Analysis

• Market Cap: $13.94B
• Dividend Yield: 0.1%
• Average Volume (3M): 1.74M
• Price to Earnings (P/E): 17.7
• Beta (1Y): 0.99
• Revenue Growth: 1.19%
• EPS Growth: -6.77%
• Country: US
• Employees: 34,000
• Sector: Industrials
• Sector Strength: 84
• Industry: Aerospace & Defense
• EPS (TTM): 1.55
• Shares Outstanding: 178,205,290
• 10 Day Avg. Volume: 2,449,775
• 30 Day Avg. Volume: 1,736,441
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.23
• Enterprise Value/Revenue: 1.22
• Enterprise Value/Gross Profit: 6.29
• Enterprise Value/Ebitda: 12.00
• 1Y Price Target: $93.55
• Price Target Upside: 19.60% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 69 Neutral
• Price Target: $87.00 ▲(11.22% Upside)

Textron's overall stock score is driven by stable financial performance and positive revenue growth from the recent earnings call. However, the stock faces challenges from declining margins, limited valuation attractiveness, and mixed technical indicators.

Positive Factors

Earnings

TXT reported consolidated 2Q revenue and EPS above consensus.

Innovation and Growth

Textron Aviation is focusing on bringing new products to market, including the M2 Gen2, CJ3 Gen2, and Ascend, indicating innovation and growth potential.

Military Sales

Bell's military sales rose 30% year-over-year, led by FLRAA.

Negative Factors

Operating Cash Flow

TXT reported operating cash flow of ($124mn), below consensus of $37mn.

Program Terminations

The Army has terminated Textron's RCV and FTUAS unmanned programs, which could pose a modest challenge for the company in the future.

Textron Business Overview & Revenue Model

Company Description

Textron Inc. operates in the aircraft, defense, industrial, and finance businesses. The company's Textron Aviation segment manufactures, sells, and services business jets, turboprop and piston engine aircraft, and military trainer and defense aircraft; and offers maintenance, inspection, and repair services, as well as sells commercial parts. Its Bell segment supplies military and commercial helicopters, tiltrotor aircrafts, and related spare parts and services. The company's Textron Systems segment offers unmanned aircraft systems, electronic systems and solutions, advanced marine crafts, piston aircraft engines, live military air-to-air and air-to-ship training, weapons and related components, and armored and specialty vehicles. Its Industrial segment offers blow-molded plastic fuel systems, including conventional plastic fuel tanks and pressurized fuel tanks for hybrid vehicle applications, clear-vision systems, and plastic tanks for catalytic reduction systems primarily to automobile original equipment manufacturers; and golf cars, off-road utility vehicles, recreational side-by-side and all-terrain vehicles, snowmobiles, light transportation vehicles, aviation ground support equipment, professional turf-maintenance equipment, and turf-care vehicles to golf courses and resorts, government agencies and municipalities, consumers, outdoor enthusiasts, and commercial and industrial users. The company's Finance segment provides financing services to purchase new and pre-owned aircraft and bell helicopters. It serves in the United States, Europe, Asia, Australia, and internationally. Textron Inc. was founded in 1923 and is headquartered in Providence, Rhode Island.

How the Company Makes Money

Textron Inc. generates revenue through the manufacturing and sale of aviation products, defense systems, and industrial equipment. The company's revenue streams are primarily divided into several segments: Textron Aviation, Bell, Textron Systems, Industrial, and Finance. Textron Aviation contributes significantly through the sale of business jets, turboprop aircraft, and aftermarket services. The Bell segment earns revenue from the sale of military and commercial helicopters. Textron Systems, which includes unmanned aircraft systems and advanced marine craft, generates income from defense contracts and other government-related business. The Industrial segment provides revenue through the sale of specialized vehicles and equipment, such as golf carts and utility vehicles. Additionally, Textron's Finance segment supports sales of Textron products through financing solutions. Strategic partnerships and contracts with government agencies and commercial entities play a crucial role in sustaining and growing Textron's revenue.

Textron Financial Statement Overview

Summary

Textron demonstrates stable growth with a TTM revenue increase of 2.63% and a net profit margin of 5.80%. The balance sheet is solid with a manageable debt-to-equity ratio of 0.41. However, slight declines in EBIT, EBITDA margins, and free cash flow pose concerns.

Income Statement

Textron has shown consistent revenue growth with a TTM revenue increase of 2.63% compared to the previous year. The gross profit margin for TTM stands at 9.91%, which is moderate, while the net profit margin is 5.80%, indicating stable profitability. However, there has been a slight decline in EBIT and EBITDA margins over the years, which could be a concern if it continues.

Balance Sheet

The company's balance sheet is stable with a debt-to-equity ratio of 0.41, suggesting a manageable level of leverage. The equity ratio is 43.52%, indicating a solid equity base. However, the return on equity (ROE) for TTM at 10.98% is lower than the previous year's 11.43%, suggesting a slight dip in efficiency at generating returns on equity.

Cash Flow

Textron's cash flow from operations is strong, with an operating cash flow to net income ratio of 1.13 for TTM, indicating good cash generation relative to net income. However, the free cash flow has decreased by 13.69% from the previous period, which could be a point of concern if this trend continues.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	13.70B	13.68B	12.87B	12.38B	11.65B
Gross Profit	2.50B	2.85B	2.67B	2.70B	1.56B
EBITDA	1.42B	1.56B	1.51B	1.39B	827.00M
Net Income	824.00M	921.00M	861.00M	746.00M	309.00M
Balance Sheet
Total Assets	16.84B	16.86B	16.29B	15.83B	15.40B
Cash, Cash Equivalents and Short-Term Investments	1.44B	2.18B	2.04B	1.92B	2.25B
Total Debt	3.59B	4.25B	3.56B	4.15B	3.71B
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: Neutral
• Last Price: 78.22
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TXT, the sentiment is Neutral. The current price of 78.22 is below the 20-day moving average (MA) of 82.06, below the 50-day MA of 79.26, and above the 200-day MA of 77.13, indicating a neutral trend. The MACD of -0.70 indicates Positive momentum. The RSI at 41.02 is Neutral, neither overbought nor oversold. The STOCH value of 16.28 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TXT.

Textron Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CW	74 Outperform	$19.28B	45.51	17.40%	0.18%	9.77%	15.66%
BWXT	74 Outperform	$16.63B	56.78	26.97%	0.66%	10.13%	10.04%
WWD	72 Outperform	$15.18B	40.05	16.76%	0.42%	5.53%	5.56%
TXT	69 Neutral	$13.94B	17.70	11.42%	0.10%	1.19%	-6.77%
DRS	66 Neutral	$11.04B	44.58	9.99%	0.43%	11.43%	32.31%
RKLB	60 Neutral	$21.45B	―	-45.38%	―	64.98%	-10.52%
Sector *	58 Neutral	HK$13.20B	4.34	-2.94%	5.79%	3.03%	-49.30%

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.