NYSE:TXT is probably undervalued for the fundamentals it is displaying.

Uncover the hidden value in TEXTRON INC (NYSE:TXT) as our stock screening tool recommends it as an undervalued choice. NYSE:TXT maintains a robust financial position and offers an attractive pricing perspective. Let's dig deeper into the analysis.

Unpacking NYSE:TXT's Valuation Rating

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NYSE:TXT boasts a 8 out of 10:

• Based on the Price/Earnings ratio, TXT is valued cheaper than 85.71% of the companies in the same industry.
• Compared to an average S&P500 Price/Earnings ratio of 24.66, TXT is valued a bit cheaper.
• 96.83% of the companies in the same industry are more expensive than TXT, based on the Price/Forward Earnings ratio.
• The average S&P500 Price/Forward Earnings ratio is at 18.30. TXT is valued slightly cheaper when compared to this.
• 80.95% of the companies in the same industry are more expensive than TXT, based on the Enterprise Value to EBITDA ratio.
• Based on the Price/Free Cash Flow ratio, TXT is valued cheaper than 93.65% of the companies in the same industry.
• The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• The decent profitability rating of TXT may justify a higher PE ratio.
• A more expensive valuation may be justified as TXT's earnings are expected to grow with 17.82% in the coming years.

How do we evaluate the Profitability for NYSE:TXT?

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:TXT has earned a 6 out of 10:

• TXT's Return On Assets of 5.49% is fine compared to the rest of the industry. TXT outperforms 76.19% of its industry peers.
• Looking at the Return On Equity, with a value of 12.87%, TXT is in the better half of the industry, outperforming 77.78% of the companies in the same industry.
• The Return On Invested Capital of TXT (6.50%) is better than 69.84% of its industry peers.
• The 3 year average ROIC (5.11%) for TXT is below the current ROIC(6.50%), indicating increased profibility in the last year.
• TXT's Profit Margin of 6.88% is fine compared to the rest of the industry. TXT outperforms 66.67% of its industry peers.
• TXT's Profit Margin has improved in the last couple of years.

Health Examination for NYSE:TXT

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NYSE:TXT was assigned a score of 5 for health:

• TXT has a better Altman-Z score (2.69) than 61.90% of its industry peers.
• TXT has a debt to FCF ratio of 3.73. This is a good value and a sign of high solvency as TXT would need 3.73 years to pay back of all of its debts.
• TXT has a Debt to FCF ratio of 3.73. This is amongst the best in the industry. TXT outperforms 87.30% of its industry peers.
• A Debt/Equity ratio of 0.45 indicates that TXT is not too dependend on debt financing.

A Closer Look at Growth for NYSE:TXT

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NYSE:TXT, the assigned 5 reflects its growth potential:

• TXT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 26.43%, which is quite impressive.
• Measured over the past years, TXT shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.36% on average per year.
• Based on estimates for the next years, TXT will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.70% on average per year.
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
• The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

Check the latest full fundamental report of TXT for a complete fundamental analysis.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.