TEXTRON INC (TXT) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TXT - US8832031012 - Common Stock
96.03 USD
-0.29 (-0.3%)
96.03 USD
0 (0%)
TXT gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 73 industry peers in the Aerospace & Defense industry. TXT has only an average score on both its financial health and profitability. TXT has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
- In the past year TXT was profitable.
- TXT had a positive operating cash flow in the past year.
- TXT had positive earnings in each of the past 5 years.
- In the past 5 years TXT always reported a positive cash flow from operatings.
1.2 Ratios
- TXT has a Return On Assets of 4.76%. This is in the better half of the industry: TXT outperforms 68.49% of its industry peers.
- TXT's Return On Equity of 11.04% is fine compared to the rest of the industry. TXT outperforms 71.23% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 6.29%, TXT is in line with its industry, outperforming 54.79% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for TXT is below the industry average of 8.56%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.76% | ||
| ROE | 11.04% | ||
| ROIC | 6.29% |
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 (5.81%) than 61.64% of its industry peers.
- TXT's Profit Margin has been stable in the last couple of years.
- With a Operating Margin value of 6.57%, TXT perfoms like the industry average, outperforming 49.32% of the companies in the same industry.
- In the last couple of years the Operating Margin of TXT has declined.
- TXT has a Gross Margin of 20.62%. This is comparable to the rest of the industry: TXT outperforms 41.10% of its industry peers.
- In the last couple of years the Gross Margin of TXT has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.57% | ||
| PM (TTM) | 5.81% | ||
| GM | 20.62% |
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.
- 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.
- Compared to 1 year ago, TXT has an improved debt to assets ratio.
2.2 Solvency
- TXT has an Altman-Z score of 2.76. 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.
- Looking at the Altman-Z score, with a value of 2.76, TXT is doing worse than 61.64% of the companies in the same industry.
- The Debt to FCF ratio of TXT is 5.37, which is a neutral value as it means it would take TXT, 5.37 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of TXT (5.37) is better than 68.49% of its industry peers.
- 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 52.05% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 5.37 | ||
| Altman-Z | 2.76 |
ROIC/WACC0.66
WACC9.52%
2.3 Liquidity
- TXT has a Current Ratio of 1.71. This is a normal value and indicates that TXT is financially healthy and should not expect problems in meeting its short term obligations.
- The Current ratio of TXT (1.71) is worse than 65.75% of its industry peers.
- A Quick Ratio of 0.73 indicates that TXT may have some problems paying its short term obligations.
- TXT has a worse Quick ratio (0.73) than 83.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.71 | ||
| Quick Ratio | 0.73 |
3. Growth
3.1 Past
- TXT shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -0.35%.
- The Earnings Per Share has been growing slightly by 7.88% on average over the past years.
- TXT shows a small growth in Revenue. In the last year, the Revenue has grown by 1.83%.
- 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)-0.35%
EPS 3Y18.42%
EPS 5Y7.88%
EPS Q2Q%10.71%
Revenue 1Y (TTM)1.83%
Revenue growth 3Y3.43%
Revenue growth 5Y0.11%
Sales Q2Q%5.11%
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 11.64% yearly.
- The Revenue is expected to grow by 3.72% on average over the next years.
EPS Next Y12.28%
EPS Next 2Y12.09%
EPS Next 3Y11.9%
EPS Next 5Y11.64%
Revenue Next Year6.02%
Revenue Next 2Y5.48%
Revenue Next 3Y4.8%
Revenue Next 5Y3.72%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better 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
- The Price/Earnings ratio is 16.79, which indicates a correct valuation of TXT.
- Based on the Price/Earnings ratio, TXT is valued cheaply inside the industry as 98.63% of the companies are valued more expensively.
- The average S&P500 Price/Earnings ratio is at 27.32. TXT is valued slightly cheaper when compared to this.
- A Price/Forward Earnings ratio of 13.95 indicates a correct valuation of TXT.
- Based on the Price/Forward Earnings ratio, TXT is valued cheaply inside the industry as 98.63% of the companies are valued more expensively.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.32, TXT is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.79 | ||
| Fwd PE | 13.95 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, TXT is valued cheaply inside the industry as 91.78% of the companies are valued more expensively.
- Based on the Price/Free Cash Flow ratio, TXT is valued cheaply inside the industry as 95.89% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.35 | ||
| EV/EBITDA | 14.46 |
4.3 Compensation for Growth
- TXT's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.37
PEG (5Y)2.13
EPS Next 2Y12.09%
EPS Next 3Y11.9%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.08%, TXT is not a good candidate for dividend investing.
- TXT's Dividend Yield is a higher than the industry average which is at 0.34.
- With a Dividend Yield of 0.08, TXT pays less dividend than the S&P500 average, which is at 1.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.08% |
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.
- TXT has decreased its dividend recently.
Dividend Growth(5Y)-4.65%
Div Incr Years0
Div Non Decr Years1
5.3 Sustainability
- TXT pays out 1.81% of its income as dividend. This is a sustainable payout ratio.
DP1.81%
EPS Next 2Y12.09%
EPS Next 3Y11.9%
TEXTRON INC / TXT FAQ
Can you provide the ChartMill fundamental rating for TEXTRON INC?
ChartMill assigns a fundamental rating of 5 / 10 to TXT.
Can you provide the valuation status for TEXTRON INC?
ChartMill assigns a valuation rating of 6 / 10 to TEXTRON INC (TXT). This can be considered as Fairly Valued.
Can you provide the profitability details for TEXTRON INC?
TEXTRON INC (TXT) has a profitability rating of 5 / 10.
What are the PE and PB ratios of TEXTRON INC (TXT) stock?
The Price/Earnings (PE) ratio for TEXTRON INC (TXT) is 16.79 and the Price/Book (PB) ratio is 2.26.
Can you provide the financial health for TXT stock?
The financial health rating of TEXTRON INC (TXT) is 4 / 10.