TEXTRON INC (TXT) Stock Fundamental Analysis
NYSE:TXT - New York Stock Exchange, Inc. - US8832031012 - Common Stock - Currency: USD
Taking everything into account, TXT scores 5 out of 10 in our fundamental rating. TXT was compared to 66 industry peers in the Aerospace & Defense industry. TXT has only an average score on both its financial health and profitability. TXT is valued quite cheap, while showing a decent growth score. This is a good 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.
TXT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of TXT (4.89%) is comparable to the rest of the industry.
TXT's Return On Equity of 11.44% is fine compared to the rest of the industry. TXT outperforms 71.88% of its industry peers.
With a Return On Invested Capital value of 6.18%, TXT perfoms like the industry average, outperforming 57.81% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for TXT is in line with the industry average of 7.98%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.89% | ||
| ROE | 11.44% | ||
| ROIC | 6.18% |
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
Looking at the Profit Margin, with a value of 6.01%, TXT is in line with its industry, outperforming 59.38% of the companies in the same industry.
In the last couple of years the Profit Margin of TXT has remained more or less at the same level.
The Operating Margin of TXT (6.52%) is comparable to the rest of the industry.
TXT's Operating Margin has declined in the last couple of years.
With a Gross Margin value of 18.54%, TXT is not doing good in the industry: 67.19% of the companies in the same industry are doing better.
TXT's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.52% | ||
| PM (TTM) | 6.01% | ||
| GM | 18.54% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), TXT is destroying value.
The number of shares outstanding for TXT has been reduced compared to 1 year ago.
TXT has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, TXT has an improved debt to assets ratio.
2.2 Solvency
TXT has an Altman-Z score of 2.47. 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.
TXT has a Altman-Z score (2.47) which is comparable to the rest of the industry.
The Debt to FCF ratio of TXT is 5.52, which is a neutral value as it means it would take TXT, 5.52 years of fcf income to pay off all of its debts.
TXT has a better Debt to FCF ratio (5.52) than 71.88% of its industry peers.
TXT has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.45, TXT perfoms like the industry average, outperforming 57.81% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 5.52 | ||
| Altman-Z | 2.47 |
ROIC/WACC0.7
WACC8.85%
2.3 Liquidity
TXT has a Current Ratio of 1.63. This is a normal value and indicates that TXT is financially healthy and should not expect problems in meeting its short term obligations.
TXT's Current ratio of 1.63 is on the low side compared to the rest of the industry. TXT is outperformed by 60.94% of its industry peers.
A Quick Ratio of 0.70 indicates that TXT may have some problems paying its short term obligations.
TXT has a worse Quick ratio (0.70) than 81.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.63 | ||
| Quick Ratio | 0.7 |
3. Growth
3.1 Past
The earnings per share for TXT have decreased by -2.14% in the last year.
Measured over the past 5 years, TXT shows a small growth in Earnings Per Share. The EPS has been growing by 7.88% on average per year.
The Revenue has been growing slightly by 0.14% in the past year.
Measured over the past years, TXT shows a small growth in Revenue. The Revenue has been growing by 0.11% on average per year.
EPS 1Y (TTM)-2.14%
EPS 3Y18.42%
EPS 5Y7.88%
EPS Q2Q%-16.25%
Revenue 1Y (TTM)0.14%
Revenue growth 3Y3.43%
Revenue growth 5Y0.11%
Sales Q2Q%-7.17%
3.2 Future
Based on estimates for the next years, TXT will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.33% on average per year.
Based on estimates for the next years, TXT will show a small growth in Revenue. The Revenue will grow by 4.48% on average per year.
EPS Next Y11.79%
EPS Next 2Y12.87%
EPS Next 3Y12.24%
EPS Next 5Y10.33%
Revenue Next Year5.61%
Revenue Next 2Y5.28%
Revenue Next 3Y4.49%
Revenue Next 5Y4.48%
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.
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
The Price/Earnings ratio is 13.20, which indicates a correct valuation of TXT.
TXT's Price/Earnings ratio is rather cheap when compared to the industry. TXT is cheaper than 92.19% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 29.63, TXT is valued rather cheaply.
TXT is valuated reasonably with a Price/Forward Earnings ratio of 11.81.
Based on the Price/Forward Earnings ratio, TXT is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
TXT is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.2 | ||
| Fwd PE | 11.81 |
4.2 Price Multiples
87.50% of the companies in the same industry are more expensive than TXT, based on the Enterprise Value to EBITDA ratio.
TXT's Price/Free Cash Flow ratio is rather cheap when compared to the industry. TXT is cheaper than 96.88% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.32 | ||
| EV/EBITDA | 12.1 |
4.3 Compensation for Growth
TXT's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as TXT's earnings are expected to grow with 12.24% in the coming years.
PEG (NY)1.12
PEG (5Y)1.67
EPS Next 2Y12.87%
EPS Next 3Y12.24%
5. Dividend
5.1 Amount
With a yearly dividend of 0.11%, TXT is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.44, TXT pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.27, TXT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.11% |
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
TXT pays out 1.46% of its income as dividend. This is a sustainable payout ratio.
DP1.46%
EPS Next 2Y12.87%
EPS Next 3Y12.24%
72.34
-0.09 (-0.12%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners87.03%
Inst Owner Change-0.38%
Ins Owners0.58%
Ins Owner Change0%
Market Cap13.21B
Analysts73.33
Price Target92.16 (27.4%)
Short Float %1.98%
Short Ratio2.82
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.11% |
Yearly Dividend0.06
Dividend Growth(5Y)-4.65%
DP1.46%
Div Incr Years0
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-3.59%
Min EPS beat(2)-7.04%
Max EPS beat(2)-0.14%
EPS beat(4)1
Avg EPS beat(4)-1.83%
Min EPS beat(4)-7.04%
Max EPS beat(4)2.98%
EPS beat(8)5
Avg EPS beat(8)4.17%
EPS beat(12)8
Avg EPS beat(12)6.29%
EPS beat(16)11
Avg EPS beat(16)9.52%
Revenue beat(2)0
Avg Revenue beat(2)-4.65%
Min Revenue beat(2)-6.11%
Max Revenue beat(2)-3.19%
Revenue beat(4)0
Avg Revenue beat(4)-4.24%
Min Revenue beat(4)-6.11%
Max Revenue beat(4)-1.86%
Revenue beat(8)0
Avg Revenue beat(8)-3.58%
Revenue beat(12)1
Avg Revenue beat(12)-3.12%
Revenue beat(16)3
Avg Revenue beat(16)-2.29%
PT rev (1m)-6.18%
PT rev (3m)-9.44%
EPS NQ rev (1m)-18.2%
EPS NQ rev (3m)-20.81%
EPS NY rev (1m)-9.62%
EPS NY rev (3m)-9.44%
Revenue NQ rev (1m)-3.84%
Revenue NQ rev (3m)-3.39%
Revenue NY rev (1m)-1.02%
Revenue NY rev (3m)-1.73%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.2 | ||
| Fwd PE | 11.81 | ||
| P/S | 0.96 | ||
| P/FCF | 20.32 | ||
| P/OCF | 13.02 | ||
| P/B | 1.83 | ||
| P/tB | 2.9 | ||
| EV/EBITDA | 12.1 |
EPS(TTM)5.48
EY7.58%
EPS(NY)6.13
Fwd EY8.47%
FCF(TTM)3.56
FCFY4.92%
OCF(TTM)5.55
OCFY7.68%
SpS75.05
BVpS39.46
TBVpS24.94
PEG (NY)1.12
PEG (5Y)1.67
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.89% | ||
| ROE | 11.44% | ||
| ROCE | 7.18% | ||
| ROIC | 6.18% | ||
| ROICexc | 6.96% | ||
| ROICexgc | 9.15% | ||
| OM | 6.52% | ||
| PM (TTM) | 6.01% | ||
| GM | 18.54% | ||
| FCFM | 4.74% |
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-Score7
Asset Turnover0.81
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 5.52 | ||
| Debt/EBITDA | 2.53 | ||
| Cap/Depr | 95.29% | ||
| Cap/Sales | 2.66% | ||
| Interest Coverage | 6.29 | ||
| Cash Conversion | 79.53% | ||
| Profit Quality | 78.88% | ||
| Current Ratio | 1.63 | ||
| Quick Ratio | 0.7 | ||
| Altman-Z | 2.47 |
F-Score7
WACC8.85%
ROIC/WACC0.7
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)-2.14%
EPS 3Y18.42%
EPS 5Y7.88%
EPS Q2Q%-16.25%
EPS Next Y11.79%
EPS Next 2Y12.87%
EPS Next 3Y12.24%
EPS Next 5Y10.33%
Revenue 1Y (TTM)0.14%
Revenue growth 3Y3.43%
Revenue growth 5Y0.11%
Sales Q2Q%-7.17%
Revenue Next Year5.61%
Revenue Next 2Y5.28%
Revenue Next 3Y4.49%
Revenue Next 5Y4.48%
EBIT growth 1Y-14.71%
EBIT growth 3Y1.11%
EBIT growth 5Y-3.59%
EBIT Next Year45.56%
EBIT Next 3Y19.72%
EBIT Next 5Y12.89%
FCF growth 1Y-24.77%
FCF growth 3Y-19%
FCF growth 5Y-0.75%
OCF growth 1Y-19.91%
OCF growth 3Y-14.07%
OCF growth 5Y0%