TEXTRON INC (TXT)
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. TXT has only an average score on both its financial health and profitability. A decent growth rate in combination with a cheap valuation! Better keep an eye on TXT.
1. Profitability
1.1 Basic Checks
TXT had positive earnings in the past year.
In the past year TXT had a positive cash flow from operations.
Each year in the past 5 years TXT has been profitable.
TXT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
TXT has a Return On Assets of 5.35%. This is in the better half of the industry: TXT outperforms 69.23% of its industry peers.
With a decent Return On Equity value of 12.67%, TXT is doing good in the industry, outperforming 75.38% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 7.15%, TXT is in the better half of the industry, outperforming 72.31% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for TXT is in line with the industry average of 7.69%.
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 better Profit Margin (6.30%) than 67.69% of its industry peers.
TXT's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 7.29%, TXT is in line with its industry, outperforming 56.92% of the companies in the same industry.
In the last couple of years the Operating Margin of TXT has remained more or less at the same level.
TXT has a Gross Margin of 14.05%. This is in the lower half of the industry: TXT underperforms 75.38% of its industry peers.
TXT's Gross Margin has declined in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), TXT is destroying value.
Compared to 1 year ago, TXT has less shares outstanding
TXT has less shares outstanding than it did 5 years ago.
TXT has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.73 indicates that TXT is not a great score, but indicates only limited risk for bankruptcy at the moment.
TXT has a Altman-Z score (2.73) which is in line with its industry peers.
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 | 2.73 |
ROIC/WACC0.76
WACC9.45%
2.3 Liquidity
TXT has a Current Ratio of 1.70. This is a normal value and indicates that TXT is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.70, TXT perfoms like the industry average, outperforming 41.54% of the companies in the same industry.
A Quick Ratio of 0.68 indicates that TXT may have some problems paying its short term obligations.
The Quick ratio of TXT (0.68) is worse 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.
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.
TXT shows a small growth in Revenue. In the last year, the Revenue has grown by 4.13%.
The Revenue has been decreasing by -0.42% on average over the past years.
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.
TXT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.36% yearly.
EPS Next Y0.36%
EPS Next 2Y10.02%
EPS Next 3Y10.43%
EPS Next 5Y7.61%
Revenue Next Year1.44%
Revenue Next 2Y4.38%
Revenue Next 3Y4.08%
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.
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
A Price/Earnings ratio of 13.39 indicates a correct valuation of TXT.
Compared to the rest of the industry, the Price/Earnings ratio of TXT indicates a rather cheap valuation: TXT is cheaper than 93.85% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.73, TXT is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 11.34, 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.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.83, TXT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.39 | ||
| Fwd PE | 11.34 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TXT is valued cheaper than 89.23% of the companies in the same industry.
96.92% 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 | 19.58 | ||
| EV/EBITDA | 11.77 |
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)37.44
PEG (5Y)1.24
EPS Next 2Y10.02%
EPS Next 3Y10.43%
5. Dividend
5.1 Amount
TXT has a yearly dividend return of 0.11%, which is pretty low.
Compared to an average industry Dividend Yield of 1.42, TXT pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.34, 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 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
1.36% of the earnings are spent on dividend by TXT. This is a low number and sustainable payout ratio.
The dividend of TXT is growing, but earnings are growing more, so the dividend growth is sustainable.
DP1.36%
EPS Next 2Y10.02%
EPS Next 3Y10.43%
TEXTRON INC
NYSE:TXT (12/20/2024, 8:04:00 PM)
After market: 86.1375 +9.29 (+12.09%)76.85
+1.03 (+1.36%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners86.34%
Inst Owner Change-1.62%
Ins Owners0.65%
Ins Owner Change0%
Market Cap14.26B
Analysts74.55
Price Target100.52 (30.8%)
Short Float %1.95%
Short Ratio3.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.11% |
Dividend Growth(5Y)0.18%
DP1.36%
Div Incr Years0
Div Non Decr Years1
Ex-Date
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)-2.35%
PT rev (3m)-3.68%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-30.68%
EPS NY rev (1m)0.76%
EPS NY rev (3m)-11.77%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-11.09%
Revenue NY rev (1m)0.39%
Revenue NY rev (3m)-3.96%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.39 | ||
| Fwd PE | 11.34 | ||
| P/S | 1.02 | ||
| P/FCF | 19.58 | ||
| P/OCF | 12.76 | ||
| P/B | 2.05 | ||
| P/tB | 3.07 | ||
| EV/EBITDA | 11.77 |
EPS(TTM)5.74
EY7.47%
EPS(NY)6.78
Fwd EY8.82%
FCF(TTM)3.92
FCFY5.11%
OCF(TTM)6.02
OCFY7.84%
SpS75.37
BVpS37.47
TBVpS25.03
PEG (NY)37.44
PEG (5Y)1.24
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 | 2.73 |
F-Score5
WACC9.45%
ROIC/WACC0.76
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 Year1.44%
Revenue Next 2Y4.38%
Revenue Next 3Y4.08%
Revenue Next 5Y4.36%
EBIT growth 1Y7.72%
EBIT growth 3Y26.56%
EBIT growth 5Y-1.21%
EBIT Next Year25.65%
EBIT Next 3Y16%
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%