TEXTRON INC (TXT) Stock Fundamental Analysis
NYSE:TXT - New York Stock Exchange, Inc. - US8832031012 - Common Stock - Currency: USD
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
In the past year TXT was profitable.
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
With a decent Return On Assets value of 4.90%, TXT is doing good in the industry, outperforming 69.23% of the companies in the same industry.
The Return On Equity of TXT (11.41%) is better than 72.31% of its industry peers.
Looking at the Return On Invested Capital, with a value of 6.12%, TXT is in line with its industry, outperforming 58.46% 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 8.44%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.9% | ||
| ROE | 11.41% | ||
| ROIC | 6.12% |
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 better Profit Margin (5.98%) than 63.08% of its industry peers.
TXT's Profit Margin has been stable in the last couple of years.
TXT's Operating Margin of 6.43% is in line compared to the rest of the industry. TXT outperforms 47.69% of its industry peers.
TXT's Operating Margin has declined in the last couple of years.
TXT's Gross Margin of 19.12% is on the low side compared to the rest of the industry. TXT is outperformed by 69.23% of its industry peers.
In the last couple of years the Gross Margin of TXT has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.43% | ||
| PM (TTM) | 5.98% | ||
| GM | 19.12% |
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
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 better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.58 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 2.58. This is comparable to the rest of the industry: TXT outperforms 41.54% of its industry peers.
The Debt to FCF ratio of TXT is 6.88, which is on the high side as it means it would take TXT, 6.88 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 6.88, TXT is doing good in the industry, outperforming 64.62% of the companies in the same industry.
A Debt/Equity ratio of 0.46 indicates that TXT is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.46, TXT is in line with its industry, outperforming 56.92% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.46 | ||
| Debt/FCF | 6.88 | ||
| Altman-Z | 2.58 |
ROIC/WACC0.63
WACC9.73%
2.3 Liquidity
TXT has a Current Ratio of 1.66. 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 1.66, TXT is not doing good in the industry: 64.62% of the companies in the same industry are doing better.
TXT has a Quick Ratio of 1.66. 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 Quick ratio of 0.69. This is amonst the worse of the industry: TXT underperforms 86.15% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.66 | ||
| Quick Ratio | 0.69 |
3. Growth
3.1 Past
TXT shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -3.30%.
The Earnings Per Share has been growing slightly by 7.88% on average over the past years.
Looking at the last year, TXT shows a small growth in Revenue. The Revenue has grown by 0.57% in the last 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)-3.3%
EPS 3Y18.42%
EPS 5Y7.88%
EPS Q2Q%6.67%
Revenue 1Y (TTM)0.57%
Revenue growth 3Y3.43%
Revenue growth 5Y0.11%
Sales Q2Q%5.45%
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 11.09% yearly.
TXT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.74% yearly.
EPS Next Y12.93%
EPS Next 2Y12.86%
EPS Next 3Y12.34%
EPS Next 5Y11.09%
Revenue Next Year5.69%
Revenue Next 2Y5.19%
Revenue Next 3Y4.33%
Revenue Next 5Y3.74%
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
TXT is valuated correctly with a Price/Earnings ratio of 14.44.
Based on the Price/Earnings ratio, TXT is valued cheaper than 98.46% of the companies in the same industry.
TXT is valuated rather cheaply when we compare the Price/Earnings ratio to 26.98, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 11.50 indicates a reasonable valuation of TXT.
TXT's Price/Forward Earnings ratio is rather cheap when compared to the industry. TXT is cheaper than 98.46% of the companies in the same industry.
TXT's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.49.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.44 | ||
| Fwd PE | 11.5 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TXT is valued cheaper than 90.77% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, TXT is valued cheaply inside the industry as 87.69% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.7 | ||
| EV/EBITDA | 13.3 |
4.3 Compensation for Growth
The 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 12.34% in the coming years.
PEG (NY)1.12
PEG (5Y)1.83
EPS Next 2Y12.86%
EPS Next 3Y12.34%
5. Dividend
5.1 Amount
With a yearly dividend of 0.10%, TXT is not a good candidate for dividend investing.
TXT's Dividend Yield is a higher than the industry average which is at 1.27.
With a Dividend Yield of 0.10, TXT pays less dividend than the S&P500 average, which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.1% |
5.2 History
The dividend of TXT decreases each year by -4.65%.
TXT has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of TXT decreased recently.
Dividend Growth(5Y)-4.65%
Div Incr Years0
Div Non Decr Years1
5.3 Sustainability
1.33% of the earnings are spent on dividend by TXT. This is a low number and sustainable payout ratio.
DP1.33%
EPS Next 2Y12.86%
EPS Next 3Y12.34%
80.29
-0.05 (-0.06%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners86.72%
Inst Owner Change-1.52%
Ins Owners0.51%
Ins Owner Change5.66%
Market Cap14.50B
Analysts73.33
Price Target88.51 (10.24%)
Short Float %2.28%
Short Ratio2.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.1% |
Yearly Dividend0.06
Dividend Growth(5Y)-4.65%
DP1.33%
Div Incr Years0
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)6.29%
Min EPS beat(2)-0.14%
Max EPS beat(2)12.71%
EPS beat(4)2
Avg EPS beat(4)2.13%
Min EPS beat(4)-7.04%
Max EPS beat(4)12.71%
EPS beat(8)5
Avg EPS beat(8)5.21%
EPS beat(12)8
Avg EPS beat(12)5.76%
EPS beat(16)11
Avg EPS beat(16)7.31%
Revenue beat(2)1
Avg Revenue beat(2)-2.69%
Min Revenue beat(2)-6.11%
Max Revenue beat(2)0.73%
Revenue beat(4)1
Avg Revenue beat(4)-2.61%
Min Revenue beat(4)-6.11%
Max Revenue beat(4)0.73%
Revenue beat(8)1
Avg Revenue beat(8)-3.01%
Revenue beat(12)1
Avg Revenue beat(12)-3.07%
Revenue beat(16)3
Avg Revenue beat(16)-2.51%
PT rev (1m)2.89%
PT rev (3m)-3.96%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.32%
EPS NY rev (1m)0.01%
EPS NY rev (3m)1.02%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.03%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)0.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.44 | ||
| Fwd PE | 11.5 | ||
| P/S | 1.04 | ||
| P/FCF | 26.7 | ||
| P/OCF | 16.16 | ||
| P/B | 1.99 | ||
| P/tB | 2.91 | ||
| EV/EBITDA | 13.3 |
EPS(TTM)5.56
EY6.92%
EPS(NY)6.98
Fwd EY8.69%
FCF(TTM)3.01
FCFY3.75%
OCF(TTM)4.97
OCFY6.19%
SpS76.84
BVpS40.3
TBVpS27.57
PEG (NY)1.12
PEG (5Y)1.83
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.9% | ||
| ROE | 11.41% | ||
| ROCE | 7.11% | ||
| ROIC | 6.12% | ||
| ROICexc | 6.8% | ||
| ROICexgc | 8.53% | ||
| OM | 6.43% | ||
| PM (TTM) | 5.98% | ||
| GM | 19.12% | ||
| FCFM | 3.91% |
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-Score5
Asset Turnover0.82
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.46 | ||
| Debt/FCF | 6.88 | ||
| Debt/EBITDA | 2.64 | ||
| Cap/Depr | 91.71% | ||
| Cap/Sales | 2.55% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 70.19% | ||
| Profit Quality | 65.42% | ||
| Current Ratio | 1.66 | ||
| Quick Ratio | 0.69 | ||
| Altman-Z | 2.58 |
F-Score5
WACC9.73%
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)-3.3%
EPS 3Y18.42%
EPS 5Y7.88%
EPS Q2Q%6.67%
EPS Next Y12.93%
EPS Next 2Y12.86%
EPS Next 3Y12.34%
EPS Next 5Y11.09%
Revenue 1Y (TTM)0.57%
Revenue growth 3Y3.43%
Revenue growth 5Y0.11%
Sales Q2Q%5.45%
Revenue Next Year5.69%
Revenue Next 2Y5.19%
Revenue Next 3Y4.33%
Revenue Next 5Y3.74%
EBIT growth 1Y-16.17%
EBIT growth 3Y1.11%
EBIT growth 5Y-3.59%
EBIT Next Year44.72%
EBIT Next 3Y19.13%
EBIT Next 5Y11.93%
FCF growth 1Y-47.89%
FCF growth 3Y-19%
FCF growth 5Y-0.75%
OCF growth 1Y-36.38%
OCF growth 3Y-14.07%
OCF growth 5Y0%