Textron (TXT) AI Stock Analysis

• Market Cap: $14.50B
• Dividend Yield: 0.1%
• Average Volume (3M): 1.69M
• Price to Earnings (P/E): 18.3
• Beta (1Y): 1.01
• Revenue Growth: 1.19%
• EPS Growth: -6.77%
• Country: US
• Employees: 34,000
• Sector: Industrials
• Sector Strength: 76
• Industry: Aerospace & Defense
• EPS (TTM): 1.55
• Shares Outstanding: 178,205,290
• 10 Day Avg. Volume: 1,217,162
• 30 Day Avg. Volume: 1,689,471
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.19
• Enterprise Value/Revenue: 1.22
• Enterprise Value/Gross Profit: 6.29
• Enterprise Value/Ebitda: 12.00
• 1Y Price Target: $93.00
• Price Target Upside: 13.57% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 71 Outperform
• Price Target: $87.00 ▲(6.24% Upside)

Textron's overall score reflects stable financial performance and positive earnings call highlights, particularly in revenue growth and the Bell segment. However, technical indicators and valuation suggest caution, with challenges in aviation margins and industrial revenue decline impacting the outlook.

Positive Factors

Aviation Growth

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

Financial Performance

TXT reported consolidated 2Q revenue and EPS above consensus.

Military Sales

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

Negative Factors

Cash Flow Concerns

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

Program Termination

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

System Program Cancellations

Systems has seen new opportunity programs canceled.

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 generates revenue through several key streams, primarily from the sale of aircraft, defense systems, and industrial products. The Aerospace segment, which includes Cessna and Bell, earns income through the manufacturing and sale of business jets, helicopters, and other aircraft, as well as through after-market services and parts. The Defense segment contributes significantly through contracts with the U.S. government and allied nations, providing military vehicles, reconnaissance systems, and other defense-related products. Additionally, Textron's Industrial segment sells a variety of equipment, including golf cars and utility vehicles, which supports its revenue. The company also benefits from financing services through Textron Financial, which provides loans and leases to customers purchasing its products. Strategic partnerships with government agencies and private sector clients further enhance Textron's revenue opportunities and market presence.

Textron Financial Statement Overview

Summary

Textron demonstrates stable growth and profitability with consistent revenue growth and a solid balance sheet. However, slight declines in margins and free cash flow growth are areas of concern.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	14.06B	13.70B	13.68B	12.87B	12.38B	11.65B
Gross Profit	2.74B	2.50B	2.85B	2.67B	2.70B	1.56B
EBITDA	1.43B	1.42B	1.56B	1.51B	1.39B	827.00M
Net Income	816.00M	824.00M	921.00M	861.00M	746.00M	309.00M
Balance Sheet
Total Assets	17.08B	16.84B	16.86B	16.29B	15.83B	15.40B
Cash, Cash Equivalents and Short-Term Investments	1.43B	1.44B	2.18B	2.04B	2.12B	2.25B
Total Debt	3.73B	3.59B	3.87B	3.56B	3.77B	4.37B
Total Liabilities	9.64B	9.63B	9.87B	9.18B	9.01B	9.55B
Stockholders Equity	7.43B	7.20B	6.99B	7.11B	6.82B	5.84B
Cash Flow
Free Cash Flow	561.00M	650.00M	864.00M	1.14B	1.22B	452.00M
Operating Cash Flow	918.00M	1.01B	1.27B	1.49B	1.60B	769.00M
Investing Cash Flow	-156.00M	-284.00M	-317.00M	-447.00M	-281.00M	-248.00M
Financing Cash Flow	-754.00M	-1.45B	-813.00M	-1.09B	-1.45B	360.00M

Textron Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 81.89
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 81.89 is above the 20-day moving average (MA) of 79.13, above the 50-day MA of 80.57, and above the 200-day MA of 76.70, indicating a bullish trend. The MACD of 0.28 indicates Negative momentum. The RSI at 58.53 is Neutral, neither overbought nor oversold. The STOCH value of 74.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TXT.

Textron Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CW	77 Outperform	$18.50B	40.41	17.46%	0.18%	9.89%	16.20%
DRS	74 Outperform	$11.16B	44.10	9.99%	0.64%	11.43%	32.31%
WWD	73 Outperform	$15.13B	38.92	16.76%	0.43%	5.53%	5.56%
TXT	71 Outperform	$14.50B	18.27	11.42%	0.10%	1.19%	-6.77%
BWXT	70 Outperform	$15.22B	50.80	26.97%	0.60%	10.13%	10.04%
Sector *	64 Neutral	$10.95B	16.37	8.81%	1.96%	2.68%	-15.33%
RKLB	55 Neutral	$23.22B	―	-40.45%	―	54.36%	-26.35%

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.