TEXTRON INC (TXT) Stock Fundamental Analysis
USA - NYSE:TXT - US8832031012 - Common Stock
81.23 USD
-1.01 (-1.23%)
79.8893 USD
-1.34 (-1.65%)
Taking everything into account, TXT scores 5 out of 10 in our fundamental rating. TXT was compared to 68 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
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
With a decent Return On Assets value of 4.78%, TXT is doing good in the industry, outperforming 66.18% of the companies in the same industry.
The Return On Equity of TXT (10.98%) is better than 73.53% of its industry peers.
TXT has a Return On Invested Capital (5.87%) which is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for TXT is in line with the industry average of 8.21%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.78% | ||
| ROE | 10.98% | ||
| ROIC | 5.87% |
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
The Profit Margin of TXT (5.80%) is better than 63.24% of its industry peers.
In the last couple of years the Profit Margin of TXT has remained more or less at the same level.
TXT has a Operating Margin (6.16%) which is comparable to the rest of the industry.
TXT's Operating Margin has declined in the last couple of years.
TXT's Gross Margin of 19.73% is on the low side compared to the rest of the industry. TXT is outperformed by 63.24% of its industry peers.
TXT's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.16% | ||
| PM (TTM) | 5.8% | ||
| GM | 19.73% |
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.
Compared to 5 years ago, TXT has less shares outstanding
Compared to 1 year ago, TXT has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.61 indicates that TXT is not a great score, but indicates only limited risk for bankruptcy at the moment.
TXT's Altman-Z score of 2.61 is in line compared to the rest of the industry. TXT outperforms 41.18% of its industry peers.
The Debt to FCF ratio of TXT is 6.68, which is on the high side as it means it would take TXT, 6.68 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 6.68, TXT is doing good in the industry, outperforming 64.71% of the companies in the same industry.
TXT has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.45, TXT is in line with its industry, outperforming 54.41% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 6.68 | ||
| Altman-Z | 2.61 |
ROIC/WACC0.63
WACC9.28%
2.3 Liquidity
A Current Ratio of 1.70 indicates that TXT should not have too much problems paying its short term obligations.
TXT's Current ratio of 1.70 is on the low side compared to the rest of the industry. TXT is outperformed by 60.29% of its industry peers.
A Quick Ratio of 0.71 indicates that TXT may have some problems paying its short term obligations.
TXT's Quick ratio of 0.71 is on the low side compared to the rest of the industry. TXT is outperformed by 82.35% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.7 | ||
| Quick Ratio | 0.71 |
3. Growth
3.1 Past
The earnings per share for TXT have decreased by -4.46% in the last year.
TXT shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.88% yearly.
The Revenue has been growing slightly by 1.19% in the past year.
TXT shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.11% yearly.
EPS 1Y (TTM)-4.46%
EPS 3Y18.42%
EPS 5Y7.88%
EPS Q2Q%0.65%
Revenue 1Y (TTM)1.19%
Revenue growth 3Y3.43%
Revenue growth 5Y0.11%
Sales Q2Q%5.36%
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 10.97% on average per year.
TXT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.86% yearly.
EPS Next Y12.73%
EPS Next 2Y12.88%
EPS Next 3Y12.11%
EPS Next 5Y10.97%
Revenue Next Year6.86%
Revenue Next 2Y5.74%
Revenue Next 3Y4.93%
Revenue Next 5Y3.86%
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 14.58.
Based on the Price/Earnings ratio, TXT is valued cheaper than 98.53% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.30, TXT is valued a bit cheaper.
With a Price/Forward Earnings ratio of 11.63, the valuation of TXT can be described as very reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TXT indicates a rather cheap valuation: TXT is cheaper than 100.00% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.73. TXT is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.58 | ||
| Fwd PE | 11.63 |
4.2 Price Multiples
TXT's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. TXT is cheaper than 92.65% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, TXT is valued cheaply inside the industry as 88.24% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.9 | ||
| EV/EBITDA | 13.44 |
4.3 Compensation for Growth
TXT's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
TXT's earnings are expected to grow with 12.11% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.15
PEG (5Y)1.85
EPS Next 2Y12.88%
EPS Next 3Y12.11%
5. Dividend
5.1 Amount
TXT has a yearly dividend return of 0.10%, which is pretty low.
Compared to an average industry Dividend Yield of 1.52, TXT pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.45, TXT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.1% |
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
1.35% of the earnings are spent on dividend by TXT. This is a low number and sustainable payout ratio.
DP1.35%
EPS Next 2Y12.88%
EPS Next 3Y12.11%
81.23
-1.01 (-1.23%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners87.72%
Inst Owner Change1.91%
Ins Owners0.52%
Ins Owner Change1.91%
Market Cap14.48B
Analysts74.29
Price Target93.75 (15.41%)
Short Float %2.5%
Short Ratio2.76
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.1% |
Yearly Dividend0.06
Dividend Growth(5Y)-4.65%
DP1.35%
Div Incr Years0
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)9.58%
Min EPS beat(2)6.44%
Max EPS beat(2)12.71%
EPS beat(4)2
Avg EPS beat(4)2.99%
Min EPS beat(4)-7.04%
Max EPS beat(4)12.71%
EPS beat(8)5
Avg EPS beat(8)3.61%
EPS beat(12)8
Avg EPS beat(12)5.28%
EPS beat(16)11
Avg EPS beat(16)6.29%
Revenue beat(2)2
Avg Revenue beat(2)0.94%
Min Revenue beat(2)0.73%
Max Revenue beat(2)1.14%
Revenue beat(4)2
Avg Revenue beat(4)-1.86%
Min Revenue beat(4)-6.11%
Max Revenue beat(4)1.14%
Revenue beat(8)2
Avg Revenue beat(8)-2.79%
Revenue beat(12)2
Avg Revenue beat(12)-2.71%
Revenue beat(16)3
Avg Revenue beat(16)-2.85%
PT rev (1m)4.55%
PT rev (3m)7.9%
EPS NQ rev (1m)-0.13%
EPS NQ rev (3m)-8.34%
EPS NY rev (1m)-0.14%
EPS NY rev (3m)-0.17%
Revenue NQ rev (1m)-0.16%
Revenue NQ rev (3m)-0.11%
Revenue NY rev (1m)0.26%
Revenue NY rev (3m)1.09%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.58 | ||
| Fwd PE | 11.63 | ||
| P/S | 1.03 | ||
| P/FCF | 25.9 | ||
| P/OCF | 15.79 | ||
| P/B | 1.95 | ||
| P/tB | 2.83 | ||
| EV/EBITDA | 13.44 |
EPS(TTM)5.57
EY6.86%
EPS(NY)6.98
Fwd EY8.6%
FCF(TTM)3.14
FCFY3.86%
OCF(TTM)5.15
OCFY6.33%
SpS78.91
BVpS41.71
TBVpS28.7
PEG (NY)1.15
PEG (5Y)1.85
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.78% | ||
| ROE | 10.98% | ||
| ROCE | 6.81% | ||
| ROIC | 5.87% | ||
| ROICexc | 6.61% | ||
| ROICexgc | 8.32% | ||
| OM | 6.16% | ||
| PM (TTM) | 5.8% | ||
| GM | 19.73% | ||
| FCFM | 3.98% |
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-Score6
Asset Turnover0.82
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 6.68 | ||
| Debt/EBITDA | 2.68 | ||
| Cap/Depr | 90.4% | ||
| Cap/Sales | 2.55% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 72.66% | ||
| Profit Quality | 68.5% | ||
| Current Ratio | 1.7 | ||
| Quick Ratio | 0.71 | ||
| Altman-Z | 2.61 |
F-Score6
WACC9.28%
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)-4.46%
EPS 3Y18.42%
EPS 5Y7.88%
EPS Q2Q%0.65%
EPS Next Y12.73%
EPS Next 2Y12.88%
EPS Next 3Y12.11%
EPS Next 5Y10.97%
Revenue 1Y (TTM)1.19%
Revenue growth 3Y3.43%
Revenue growth 5Y0.11%
Sales Q2Q%5.36%
Revenue Next Year6.86%
Revenue Next 2Y5.74%
Revenue Next 3Y4.93%
Revenue Next 5Y3.86%
EBIT growth 1Y-19.07%
EBIT growth 3Y1.11%
EBIT growth 5Y-3.59%
EBIT Next Year50.55%
EBIT Next 3Y20.02%
EBIT Next 5Y12.03%
FCF growth 1Y-41.1%
FCF growth 3Y-19%
FCF growth 5Y-0.75%
OCF growth 1Y-31.26%
OCF growth 3Y-14.07%
OCF growth 5Y0%