TEXTRON INC (TXT) Stock Fundamental Analysis
USA - NYSE:TXT - US8832031012 - Common Stock
81.36 USD
-0.29 (-0.36%)
81.36 USD
0 (0%)
Overall TXT gets a fundamental rating of 5 out of 10. We evaluated TXT against 70 industry peers in the Aerospace & Defense industry. TXT has only an average score on both its financial health and profitability. 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.
Each year in the past 5 years TXT had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 4.78%, TXT is in the better half of the industry, outperforming 64.79% of the companies in the same industry.
TXT's Return On Equity of 10.98% is fine compared to the rest of the industry. TXT outperforms 73.24% of its industry peers.
TXT has a Return On Invested Capital of 5.87%. This is comparable to the rest of the industry: TXT outperforms 53.52% of its industry peers.
The Average Return On Invested Capital over the past 3 years for TXT is in line with the industry average of 8.41%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.78% | ||
| ROE | 10.98% | ||
| ROIC | 5.87% |
ROA(3y)5.21%
ROA(5y)4.47%
ROE(3y)12.24%
ROE(5y)10.59%
ROIC(3y)6.46%
ROIC(5y)5.77%
1.3 Margins
TXT has a Profit Margin of 5.80%. This is in the better half of the industry: TXT outperforms 63.38% of its industry peers.
TXT's Profit Margin has been stable in the last couple of years.
Looking at the Operating Margin, with a value of 6.16%, TXT is in line with its industry, outperforming 47.89% of the companies in the same industry.
In the last couple of years the Operating Margin of TXT has declined.
Looking at the Gross Margin, with a value of 19.73%, TXT is doing worse than 63.38% of the companies in the same industry.
TXT's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.16% | ||
| PM (TTM) | 5.8% | ||
| GM | 19.73% |
OM growth 3Y-2.25%
OM growth 5Y-3.69%
PM growth 3Y-0.06%
PM growth 5Y0.11%
GM growth 3Y3.26%
GM growth 5Y2.58%
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.
TXT has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, TXT has less shares outstanding
TXT has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.60 indicates that TXT is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of TXT (2.60) is worse than 61.97% of its industry peers.
The Debt to FCF ratio of TXT is 6.68, which is on the high side as it means it would take TXT, 6.68 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 6.68, TXT is doing good in the industry, outperforming 66.20% of the companies in the same industry.
A Debt/Equity ratio of 0.45 indicates that TXT is not too dependend on debt financing.
TXT's Debt to Equity ratio of 0.45 is in line compared to the rest of the industry. TXT outperforms 54.93% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 6.68 | ||
| Altman-Z | 2.6 |
ROIC/WACC0.63
WACC9.34%
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 worse than 60.56% of its industry peers.
A Quick Ratio of 0.71 indicates that TXT may have some problems paying its short term obligations.
TXT has a Quick ratio of 0.71. This is amonst the worse of the industry: TXT underperforms 85.92% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.7 | ||
| Quick Ratio | 0.71 |
3. Growth
3.1 Past
TXT shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -4.46%.
TXT shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.88% yearly.
TXT shows a small growth in Revenue. In the last year, the Revenue has grown by 1.19%.
The Revenue has been growing slightly by 0.11% on average over the past years.
EPS 1Y (TTM)-4.46%
EPS 3Y18.42%
EPS 5Y7.88%
EPS Q2Q%0.65%
Revenue 1Y (TTM)1.19%
Revenue growth 3Y3.43%
Revenue growth 5Y0.11%
Sales Q2Q%5.36%
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 10.97% yearly.
The Revenue is expected to grow by 3.86% on average over the next years.
EPS Next Y12.73%
EPS Next 2Y12.88%
EPS Next 3Y12.11%
EPS Next 5Y10.97%
Revenue Next Year6.96%
Revenue Next 2Y5.84%
Revenue Next 3Y5.01%
Revenue Next 5Y3.86%
3.3 Evolution
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.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 14.61, which indicates a correct valuation of TXT.
Based on the Price/Earnings ratio, TXT is valued cheaply inside the industry as 98.59% of the companies are valued more expensively.
TXT is valuated rather cheaply when we compare the Price/Earnings ratio to 27.42, which is the current average of the S&P500 Index.
TXT is valuated reasonably with a Price/Forward Earnings ratio of 11.65.
Based on the Price/Forward Earnings ratio, TXT is valued cheaper than 97.18% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of TXT to the average of the S&P500 Index (22.94), we can say TXT is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.61 | ||
| Fwd PE | 11.65 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TXT indicates a rather cheap valuation: TXT is cheaper than 94.37% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, TXT is valued cheaper than 88.73% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.94 | ||
| EV/EBITDA | 13.31 |
4.3 Compensation for Growth
TXT's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
TXT's earnings are expected to grow with 12.11% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.15
PEG (5Y)1.85
EPS Next 2Y12.88%
EPS Next 3Y12.11%
5. Dividend
5.1 Amount
TXT has a yearly dividend return of 0.10%, which is pretty low.
Compared to an average industry Dividend Yield of 1.16, 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 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.1% |
5.2 History
The dividend of TXT decreases each year by -4.65%.
TXT has been paying a dividend for at least 10 years, so it has a reliable track record.
TXT has decreased its dividend recently.
Dividend Growth(5Y)-4.65%
Div Incr Years0
Div Non Decr Years1
5.3 Sustainability
1.35% of the earnings are spent on dividend by TXT. This is a low number and sustainable payout ratio.
DP1.35%
EPS Next 2Y12.88%
EPS Next 3Y12.11%
81.36
-0.29 (-0.36%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners89.03%
Inst Owner Change0.03%
Ins Owners0.52%
Ins Owner Change1.91%
Market Cap14.50B
Analysts74
Price Target92.73 (13.97%)
Short Float %2.62%
Short Ratio3.01
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.1% |
Yearly Dividend0.06
Dividend Growth(5Y)-4.65%
DP1.35%
Div Incr Years0
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)9.58%
Min EPS beat(2)6.44%
Max EPS beat(2)12.71%
EPS beat(4)2
Avg EPS beat(4)2.99%
Min EPS beat(4)-7.04%
Max EPS beat(4)12.71%
EPS beat(8)5
Avg EPS beat(8)3.61%
EPS beat(12)8
Avg EPS beat(12)5.28%
EPS beat(16)11
Avg EPS beat(16)6.29%
Revenue beat(2)2
Avg Revenue beat(2)0.94%
Min Revenue beat(2)0.73%
Max Revenue beat(2)1.14%
Revenue beat(4)2
Avg Revenue beat(4)-1.86%
Min Revenue beat(4)-6.11%
Max Revenue beat(4)1.14%
Revenue beat(8)2
Avg Revenue beat(8)-2.79%
Revenue beat(12)2
Avg Revenue beat(12)-2.71%
Revenue beat(16)3
Avg Revenue beat(16)-2.85%
PT rev (1m)-1.1%
PT rev (3m)3.4%
EPS NQ rev (1m)-0.52%
EPS NQ rev (3m)-7.79%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.14%
Revenue NQ rev (1m)-0.05%
Revenue NQ rev (3m)-0.19%
Revenue NY rev (1m)0.09%
Revenue NY rev (3m)1.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.61 | ||
| Fwd PE | 11.65 | ||
| P/S | 1.03 | ||
| P/FCF | 25.94 | ||
| P/OCF | 15.81 | ||
| P/B | 1.95 | ||
| P/tB | 2.84 | ||
| EV/EBITDA | 13.31 |
EPS(TTM)5.57
EY6.85%
EPS(NY)6.98
Fwd EY8.58%
FCF(TTM)3.14
FCFY3.86%
OCF(TTM)5.15
OCFY6.32%
SpS78.91
BVpS41.71
TBVpS28.7
PEG (NY)1.15
PEG (5Y)1.85
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.78% | ||
| ROE | 10.98% | ||
| ROCE | 6.81% | ||
| ROIC | 5.87% | ||
| ROICexc | 6.61% | ||
| ROICexgc | 8.32% | ||
| OM | 6.16% | ||
| PM (TTM) | 5.8% | ||
| GM | 19.73% | ||
| FCFM | 3.98% |
ROA(3y)5.21%
ROA(5y)4.47%
ROE(3y)12.24%
ROE(5y)10.59%
ROIC(3y)6.46%
ROIC(5y)5.77%
ROICexc(3y)7.59%
ROICexc(5y)6.85%
ROICexgc(3y)9.98%
ROICexgc(5y)9.07%
ROCE(3y)7.5%
ROCE(5y)6.7%
ROICexcg growth 3Y-0.61%
ROICexcg growth 5Y-6.86%
ROICexc growth 3Y-0.39%
ROICexc growth 5Y-5.86%
OM growth 3Y-2.25%
OM growth 5Y-3.69%
PM growth 3Y-0.06%
PM growth 5Y0.11%
GM growth 3Y3.26%
GM growth 5Y2.58%
F-Score6
Asset Turnover0.82
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 6.68 | ||
| Debt/EBITDA | 2.68 | ||
| Cap/Depr | 90.4% | ||
| Cap/Sales | 2.55% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 72.66% | ||
| Profit Quality | 68.5% | ||
| Current Ratio | 1.7 | ||
| Quick Ratio | 0.71 | ||
| Altman-Z | 2.6 |
F-Score6
WACC9.34%
ROIC/WACC0.63
Cap/Depr(3y)95.41%
Cap/Depr(5y)92.69%
Cap/Sales(3y)2.78%
Cap/Sales(5y)2.82%
Profit Quality(3y)101.47%
Profit Quality(5y)122.86%
High Growth Momentum
Growth
EPS 1Y (TTM)-4.46%
EPS 3Y18.42%
EPS 5Y7.88%
EPS Q2Q%0.65%
EPS Next Y12.73%
EPS Next 2Y12.88%
EPS Next 3Y12.11%
EPS Next 5Y10.97%
Revenue 1Y (TTM)1.19%
Revenue growth 3Y3.43%
Revenue growth 5Y0.11%
Sales Q2Q%5.36%
Revenue Next Year6.96%
Revenue Next 2Y5.84%
Revenue Next 3Y5.01%
Revenue Next 5Y3.86%
EBIT growth 1Y-19.07%
EBIT growth 3Y1.11%
EBIT growth 5Y-3.59%
EBIT Next Year50.55%
EBIT Next 3Y20.02%
EBIT Next 5Y12.03%
FCF growth 1Y-41.1%
FCF growth 3Y-19%
FCF growth 5Y-0.75%
OCF growth 1Y-31.26%
OCF growth 3Y-14.07%
OCF growth 5Y0%