TEXTRON INC (TXT)
US8832031012 - Common Stock
We assign a fundamental rating of 5 out of 10 to TXT. TXT was compared to 65 industry peers in the Aerospace & Defense industry. TXT has only an average score on both its financial health and profitability. TXT is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
TXT had positive earnings in the past year.
TXT had a positive operating cash flow in the past year.
In the past 5 years TXT has always been profitable.
TXT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 5.35%, TXT is doing good in the industry, outperforming 69.23% of the companies in the same industry.
The Return On Equity of TXT (12.67%) is better than 75.38% of its industry peers.
TXT has a better Return On Invested Capital (7.15%) than 70.77% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TXT is in line with the industry average of 7.71%.
The last Return On Invested Capital (7.15%) for TXT is above the 3 year average (6.26%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.35% | ||
| ROE | 12.67% | ||
| ROIC | 7.15% |
ROA(3y)5.15%
ROA(5y)4.58%
ROE(3y)12.08%
ROE(5y)11.26%
ROIC(3y)6.26%
ROIC(5y)6.09%
1.3 Margins
TXT has a Profit Margin of 6.30%. This is in the better half of the industry: TXT outperforms 67.69% of its industry peers.
TXT's Profit Margin has declined in the last couple of years.
With a Operating Margin value of 7.29%, TXT perfoms like the industry average, outperforming 56.92% of the companies in the same industry.
TXT's Operating Margin has been stable in the last couple of years.
TXT has a worse Gross Margin (14.05%) than 73.85% of its industry peers.
In the last couple of years the Gross Margin of TXT has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.29% | ||
| PM (TTM) | 6.3% | ||
| GM | 14.05% |
OM growth 3Y19.96%
OM growth 5Y-0.79%
PM growth 3Y36.4%
PM growth 5Y-5.1%
GM growth 3Y-12.62%
GM growth 5Y-12.13%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so TXT is destroying value.
Compared to 1 year ago, TXT has less shares outstanding
The number of shares outstanding for TXT has been reduced compared to 5 years ago.
TXT has a worse debt/assets ratio than last year.
2.2 Solvency
TXT has an Altman-Z score of 2.82. This is not the best score and indicates that TXT is in the grey zone with still only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.82, TXT is in line with its industry, outperforming 52.31% of the companies in the same industry.
TXT has a debt to FCF ratio of 4.92. This is a neutral value as TXT would need 4.92 years to pay back of all of its debts.
TXT's Debt to FCF ratio of 4.92 is fine compared to the rest of the industry. TXT outperforms 72.31% of its industry peers.
A Debt/Equity ratio of 0.46 indicates that TXT is not too dependend on debt financing.
TXT has a Debt to Equity ratio (0.46) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.46 | ||
| Debt/FCF | 4.92 | ||
| Altman-Z | 2.82 |
ROIC/WACC0.82
WACC8.73%
2.3 Liquidity
A Current Ratio of 1.70 indicates that TXT should not have too much problems paying its short term obligations.
The Current ratio of TXT (1.70) is comparable to the rest of the industry.
TXT has a Quick Ratio of 1.70. This is a bad value and indicates that TXT is not financially healthy enough and could expect problems in meeting its short term obligations.
TXT has a worse Quick ratio (0.68) than 80.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.7 | ||
| Quick Ratio | 0.68 |
3. Growth
3.1 Past
TXT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.21%, which is quite good.
TXT shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.82% yearly.
Looking at the last year, TXT shows a small growth in Revenue. The Revenue has grown by 4.13% in the last year.
TXT shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.42% yearly.
EPS 1Y (TTM)13.21%
EPS 3Y39.34%
EPS 5Y10.82%
EPS Q2Q%-6.04%
Revenue 1Y (TTM)4.13%
Revenue growth 3Y5.5%
Revenue growth 5Y-0.42%
Sales Q2Q%2.51%
3.2 Future
TXT is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.83% yearly.
The Revenue is expected to grow by 4.93% on average over the next years.
EPS Next Y-0.4%
EPS Next 2Y9.91%
EPS Next 3Y10.53%
EPS Next 5Y10.83%
Revenue Next Year1.05%
Revenue Next 2Y4.26%
Revenue Next 3Y4.1%
Revenue Next 5Y4.93%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 14.85 indicates a correct valuation of TXT.
Based on the Price/Earnings ratio, TXT is valued cheaper than 90.77% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.96, TXT is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 12.60, the valuation of TXT can be described as correct.
Based on the Price/Forward Earnings ratio, TXT is valued cheaply inside the industry as 95.38% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 23.82. TXT is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.85 | ||
| Fwd PE | 12.6 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TXT is valued cheaply inside the industry as 89.23% of the companies are valued more expensively.
93.85% of the companies in the same industry are more expensive than TXT, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.73 | ||
| EV/EBITDA | 12.71 |
4.3 Compensation for Growth
TXT has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.37
EPS Next 2Y9.91%
EPS Next 3Y10.53%
5. Dividend
5.1 Amount
With a yearly dividend of 0.09%, TXT is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.49, TXT pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.09, TXT pays less dividend than the S&P500 average, which is at 2.23.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.09% |
5.2 History
The dividend of TXT has a limited annual growth rate of 0.18%.
TXT has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)0.18%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
1.36% of the earnings are spent on dividend by TXT. This is a low number and sustainable payout ratio.
TXT's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP1.36%
EPS Next 2Y9.91%
EPS Next 3Y10.53%
TEXTRON INC
NYSE:TXT (11/22/2024, 11:34:07 AM)
85.26
+1.3 (+1.55%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap15.82B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.09% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.85 | ||
| Fwd PE | 12.6 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)1.37
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.35% | ||
| ROE | 12.67% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 7.29% | ||
| PM (TTM) | 6.3% | ||
| GM | 14.05% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.85
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.46 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.7 | ||
| Quick Ratio | 0.68 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)13.21%
EPS 3Y39.34%
EPS 5Y
EPS Q2Q%
EPS Next Y-0.4%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)4.13%
Revenue growth 3Y5.5%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y