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NYSE:TXT is an undervalued gem with solid fundamentals.

By Mill Chart

Last update: Dec 8, 2023

TEXTRON INC (NYSE:TXT) was identified as a decent value stock by our stock screener. NYSE:TXT scores well on profitability, solvency and liquidity. At the same time it seems to be priced very reasonably. We'll explore this a bit deeper below.

Assessing Valuation Metrics for NYSE:TXT

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NYSE:TXT was assigned a score of 8 for valuation:

  • TXT's Price/Earnings ratio is rather cheap when compared to the industry. TXT is cheaper than 93.65% of the companies in the same industry.
  • Compared to an average S&P500 Price/Earnings ratio of 24.90, TXT is valued a bit cheaper.
  • 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.
  • TXT's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 19.99.
  • TXT's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. TXT is cheaper than 85.71% of the companies in the same industry.
  • TXT's Price/Free Cash Flow ratio is rather cheap when compared to the industry. TXT is cheaper than 93.65% of the companies in the same industry.
  • The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
  • The decent profitability rating of TXT may justify a higher PE ratio.
  • TXT's earnings are expected to grow with 17.82% in the coming years. This may justify a more expensive valuation.

A Closer Look at Profitability for NYSE:TXT

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:TXT was assigned a score of 6 for profitability:

  • Looking at the Return On Assets, with a value of 5.75%, TXT is in the better half of the industry, outperforming 73.02% of the companies in the same industry.
  • TXT has a better Return On Equity (13.43%) than 77.78% of its industry peers.
  • With a decent Return On Invested Capital value of 6.66%, TXT is doing good in the industry, outperforming 71.43% of the companies in the same industry.
  • The 3 year average ROIC (5.11%) for TXT is below the current ROIC(6.66%), indicating increased profibility in the last year.
  • With a decent Profit Margin value of 7.07%, TXT is doing good in the industry, outperforming 68.25% of the companies in the same industry.
  • In the last couple of years the Profit Margin of TXT has grown nicely.
  • The Operating Margin of TXT (7.05%) is better than 61.90% of its industry peers.

Health Assessment of NYSE:TXT

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:TXT has achieved a 5 out of 10:

  • TXT has a Debt to FCF ratio of 4.12. This is amongst the best in the industry. TXT outperforms 84.13% of its industry peers.
  • A Debt/Equity ratio of 0.45 indicates that TXT is not too dependend on debt financing.

Evaluating Growth: NYSE:TXT

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:TXT has earned a 5 for growth:

  • The Earnings Per Share has grown by an impressive 30.67% over the past year.
  • Measured over the past years, TXT shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.36% on average per year.
  • The Earnings Per Share is expected to grow by 15.70% on average over the next years. This is quite good.
  • 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.

More Decent Value stocks can be found in our Decent Value screener.

Check the latest full fundamental report of TXT for a complete fundamental analysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.

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TEXTRON INC

NYSE:TXT (2/22/2024, 12:38:16 PM)

85.79

+0.57 (+0.67%)

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