TEXTRON INC (TXT) Stock Fundamental Analysis
NYSE:TXT - New York Stock Exchange, Inc. - US8832031012 - Common Stock
Overall TXT gets a fundamental rating of 5 out of 10. We evaluated TXT against 65 industry peers in the Aerospace & Defense industry. Both the profitability and the financial health of TXT get a neutral evaluation. Nothing too spectacular is happening here. TXT scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
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.
In the past 5 years TXT always reported a positive cash flow from operatings.
1.2 Ratios
TXT has a better Return On Assets (5.35%) than 68.75% of its industry peers.
Looking at the Return On Equity, with a value of 12.67%, TXT is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
With a decent Return On Invested Capital value of 7.15%, TXT is doing good in the industry, outperforming 67.19% of the companies in the same industry.
TXT had an Average Return On Invested Capital over the past 3 years of 6.26%. This is in line with the industry average of 7.66%.
The 3 year average ROIC (6.26%) for TXT is below the current ROIC(7.15%), indicating increased profibility in the last year.
| 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 67.19% of its industry peers.
TXT's Profit Margin has declined in the last couple of years.
TXT has a Operating Margin (7.29%) which is comparable to the rest of the industry.
TXT's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 14.05%, TXT is doing worse than 76.56% of the companies in the same industry.
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
TXT has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for TXT has been reduced compared to 1 year ago.
Compared to 5 years ago, TXT has less shares outstanding
TXT has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.78 indicates that TXT is not a great score, but indicates only limited risk for bankruptcy at the moment.
TXT has a Altman-Z score of 2.78. This is comparable to the rest of the industry: TXT outperforms 43.75% of its industry peers.
The Debt to FCF ratio of TXT is 4.92, which is a neutral value as it means it would take TXT, 4.92 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 4.92, TXT is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
TXT has a Debt/Equity ratio of 0.46. This is a healthy value indicating a solid balance between debt and equity.
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 | 2.78 |
ROIC/WACC0.72
WACC9.96%
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.
A Quick Ratio of 0.68 indicates that TXT may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.68, TXT is doing worse than 81.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.7 | ||
| Quick Ratio | 0.68 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 13.21% over the past year.
Measured over the past years, TXT shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.82% on average per year.
The Revenue has been growing slightly by 4.13% in the past 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
Based on estimates for the next years, TXT will show a small growth in Earnings Per Share. The EPS will grow by 7.61% on average per year.
Based on estimates for the next years, TXT will show a small growth in Revenue. The Revenue will grow by 4.36% on average per year.
EPS Next Y0.36%
EPS Next 2Y10.02%
EPS Next 3Y10.43%
EPS Next 5Y7.61%
Revenue Next Year0.97%
Revenue Next 2Y3.89%
Revenue Next 3Y3.93%
Revenue Next 5Y4.36%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less 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
Based on the Price/Earnings ratio of 14.15, the valuation of TXT can be described as correct.
Based on the Price/Earnings ratio, TXT is valued cheaply inside the industry as 92.19% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of TXT to the average of the S&P500 Index (28.29), we can say TXT is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 11.98, the valuation of TXT can be described as reasonable.
TXT's Price/Forward Earnings ratio is rather cheap when compared to the industry. TXT is cheaper than 100.00% of the companies in the same industry.
TXT is valuated cheaply when we compare the Price/Forward Earnings ratio to 24.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.15 | ||
| Fwd PE | 11.98 |
4.2 Price Multiples
TXT's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. TXT is cheaper than 90.63% of the companies in the same industry.
TXT's Price/Free Cash Flow ratio is rather cheap when compared to the industry. TXT is cheaper than 98.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.69 | ||
| EV/EBITDA | 12.35 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates TXT does not grow enough to justify the current Price/Earnings ratio.
TXT has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)39.56
PEG (5Y)1.31
EPS Next 2Y10.02%
EPS Next 3Y10.43%
5. Dividend
5.1 Amount
With a yearly dividend of 0.10%, TXT is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.36, TXT pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.10, TXT pays less dividend than the S&P500 average, which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.1% |
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.
The dividend of TXT decreased recently.
Dividend Growth(5Y)0.18%
Div Incr Years0
Div Non Decr Years1
5.3 Sustainability
TXT pays out 1.36% of its income as dividend. This is a sustainable payout ratio.
TXT's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP1.36%
EPS Next 2Y10.02%
EPS Next 3Y10.43%
TEXTRON INC
NYSE:TXT (1/21/2025, 8:04:00 PM)
After market: 81.26 +0.06 (+0.07%)81.2
+2.04 (+2.58%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners86.34%
Inst Owner Change-0.43%
Ins Owners0.65%
Ins Owner Change0%
Market Cap15.06B
Analysts75.45
Price Target99.36 (22.36%)
Short Float %2.23%
Short Ratio3.52
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.1% |
Yearly Dividend0.08
Dividend Growth(5Y)0.18%
DP1.36%
Div Incr Years0
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-2.03%
Min EPS beat(2)-7.04%
Max EPS beat(2)2.98%
EPS beat(4)2
Avg EPS beat(4)-1.06%
Min EPS beat(4)-7.04%
Max EPS beat(4)2.98%
EPS beat(8)5
Avg EPS beat(8)3.93%
EPS beat(12)8
Avg EPS beat(12)6.1%
EPS beat(16)12
Avg EPS beat(16)10.48%
Revenue beat(2)0
Avg Revenue beat(2)-2.53%
Min Revenue beat(2)-3.19%
Max Revenue beat(2)-1.86%
Revenue beat(4)0
Avg Revenue beat(4)-3.32%
Min Revenue beat(4)-5.8%
Max Revenue beat(4)-1.86%
Revenue beat(8)0
Avg Revenue beat(8)-2.85%
Revenue beat(12)1
Avg Revenue beat(12)-2.98%
Revenue beat(16)4
Avg Revenue beat(16)-1.61%
PT rev (1m)-1.15%
PT rev (3m)-4.79%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-30.68%
EPS NY rev (1m)0%
EPS NY rev (3m)-11.77%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-11.09%
Revenue NY rev (1m)-0.47%
Revenue NY rev (3m)-4.35%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.15 | ||
| Fwd PE | 11.98 | ||
| P/S | 1.08 | ||
| P/FCF | 20.69 | ||
| P/OCF | 13.49 | ||
| P/B | 2.17 | ||
| P/tB | 3.24 | ||
| EV/EBITDA | 12.35 |
EPS(TTM)5.74
EY7.07%
EPS(NY)6.78
Fwd EY8.35%
FCF(TTM)3.92
FCFY4.83%
OCF(TTM)6.02
OCFY7.42%
SpS75.37
BVpS37.47
TBVpS25.03
PEG (NY)39.56
PEG (5Y)1.31
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.35% | ||
| ROE | 12.67% | ||
| ROCE | 8.43% | ||
| ROIC | 7.15% | ||
| ROICexc | 8.04% | ||
| ROICexgc | 10.24% | ||
| OM | 7.29% | ||
| PM (TTM) | 6.3% | ||
| GM | 14.05% | ||
| FCFM | 5.21% |
ROA(3y)5.15%
ROA(5y)4.58%
ROE(3y)12.08%
ROE(5y)11.26%
ROIC(3y)6.26%
ROIC(5y)6.09%
ROICexc(3y)7.5%
ROICexc(5y)7.23%
ROICexgc(3y)9.88%
ROICexgc(5y)9.69%
ROCE(3y)7.37%
ROCE(5y)7.18%
ROICexcg growth 3Y22.29%
ROICexcg growth 5Y-4.58%
ROICexc growth 3Y24.75%
ROICexc growth 5Y-2.59%
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%
F-Score5
Asset Turnover0.85
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.46 | ||
| Debt/FCF | 4.92 | ||
| Debt/EBITDA | 2.3 | ||
| Cap/Depr | 101.83% | ||
| Cap/Sales | 2.78% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 79.73% | ||
| Profit Quality | 82.63% | ||
| Current Ratio | 1.7 | ||
| Quick Ratio | 0.68 | ||
| Altman-Z | 2.78 |
F-Score5
WACC9.96%
ROIC/WACC0.72
Cap/Depr(3y)95.7%
Cap/Depr(5y)89.93%
Cap/Sales(3y)2.91%
Cap/Sales(5y)2.79%
Profit Quality(3y)129.82%
Profit Quality(5y)123.65%
High Growth Momentum
Growth
EPS 1Y (TTM)13.21%
EPS 3Y39.34%
EPS 5Y10.82%
EPS Q2Q%-6.04%
EPS Next Y0.36%
EPS Next 2Y10.02%
EPS Next 3Y10.43%
EPS Next 5Y7.61%
Revenue 1Y (TTM)4.13%
Revenue growth 3Y5.5%
Revenue growth 5Y-0.42%
Sales Q2Q%2.51%
Revenue Next Year0.97%
Revenue Next 2Y3.89%
Revenue Next 3Y3.93%
Revenue Next 5Y4.36%
EBIT growth 1Y7.72%
EBIT growth 3Y26.56%
EBIT growth 5Y-1.21%
EBIT Next Year24.39%
EBIT Next 3Y15.55%
EBIT Next 5Y11.48%
FCF growth 1Y-28.84%
FCF growth 3Y24.2%
FCF growth 5Y3.2%
OCF growth 1Y-19.41%
OCF growth 3Y18.13%
OCF growth 5Y2.72%