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. TXT has only an average score on both its financial health and profitability. TXT is valued quite cheap, but it does not seem to be growing. This makes TXT very considerable for value investing!
1. Profitability
1.1 Basic Checks
In the past year TXT was profitable.
TXT had a positive operating cash flow in the past year.
Each year in the past 5 years TXT has been profitable.
In the past 5 years TXT always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of TXT (5.35%) is better than 68.75% of its industry peers.
The Return On Equity of TXT (12.67%) is better than 75.00% of its industry peers.
TXT has a Return On Invested Capital of 7.15%. This is in the better half of the industry: TXT outperforms 67.19% of its industry peers.
TXT had an Average Return On Invested Capital over the past 3 years of 6.26%. This is in line with the industry average of 7.66%.
The last Return On Invested Capital (7.15%) for TXT is above the 3 year average (6.26%), which is a sign of increasing profitability.
| 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's Profit Margin of 6.30% is fine compared to the rest of the industry. TXT outperforms 67.19% of its industry peers.
In the last couple of years the Profit Margin of TXT has declined.
With a Operating Margin value of 7.29%, TXT perfoms like the industry average, outperforming 53.13% 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.
With a Gross Margin value of 14.05%, TXT is not doing good in the industry: 76.56% of the companies in the same industry are doing better.
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
TXT has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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
TXT has a better debt/assets ratio than last year.
2.2 Solvency
TXT has an Altman-Z score of 2.75. 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 2.75, TXT is in line with its industry, outperforming 43.75% of the companies in the same industry.
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.
With a decent Debt to FCF ratio value of 4.92, TXT is doing good in the industry, outperforming 75.00% of the companies in the same industry.
TXT has a Debt/Equity ratio of 0.46. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.46, TXT is in line with its industry, outperforming 56.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.46 | ||
| Debt/FCF | 4.92 | ||
| Altman-Z | 2.75 |
ROIC/WACC0.72
WACC9.98%
2.3 Liquidity
A Current Ratio of 1.70 indicates that TXT should not have too much problems paying its short term obligations.
TXT has a Current ratio of 1.70. This is comparable to the rest of the industry: TXT outperforms 40.63% of its industry peers.
A Quick Ratio of 0.68 indicates that TXT may have some problems paying its short term obligations.
With a Quick ratio value of 0.68, TXT is not doing good in the industry: 81.25% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.7 | ||
| Quick Ratio | 0.68 |
3. Growth
3.1 Past
The earnings per share for TXT have decreased by -2.14% in the last year.
The Earnings Per Share has been growing slightly by 7.88% on average over the past years.
EPS 1Y (TTM)-2.14%
EPS 3Y18.42%
EPS 5Y7.88%
EPS Q2Q%-16.25%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%-7.17%
3.2 Future
The Earnings Per Share is expected to grow by 10.19% on average over the next years. This is quite good.
The Revenue is expected to grow by 5.18% on average over the next years.
EPS Next Y23.69%
EPS Next 2Y17.31%
EPS Next 3Y14.13%
EPS Next 5Y10.19%
Revenue Next Year6.43%
Revenue Next 2Y5.07%
Revenue Next 3Y5.26%
Revenue Next 5Y5.18%
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.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 14.09, the valuation of TXT can be described as correct.
Compared to the rest of the industry, the Price/Earnings ratio of TXT indicates a rather cheap valuation: TXT is cheaper than 92.19% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of TXT to the average of the S&P500 Index (28.58), we can say TXT is valued rather cheaply.
With a Price/Forward Earnings ratio of 11.39, the valuation of TXT can be described as very reasonable.
Based on the Price/Forward Earnings ratio, TXT is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of TXT to the average of the S&P500 Index (24.47), we can say TXT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.09 | ||
| Fwd PE | 11.39 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TXT is valued cheaper than 90.63% 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 98.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.67 | ||
| EV/EBITDA | 11.95 |
4.3 Compensation for Growth
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 14.13% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.59
PEG (5Y)1.79
EPS Next 2Y17.31%
EPS Next 3Y14.13%
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 1.34, TXT pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.27, 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 -4.77%.
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)-4.77%
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.
DP1.36%
EPS Next 2Y17.31%
EPS Next 3Y14.13%
TEXTRON INC
NYSE:TXT (1/24/2025, 8:12:30 PM)
After market: 77.2 0 (0%)77.2
-1.01 (-1.29%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners86.34%
Inst Owner Change-0.43%
Ins Owners0.65%
Ins Owner Change0%
Market Cap14.32B
Analysts75.45
Price Target99.36 (28.7%)
Short Float %2.23%
Short Ratio3.52
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.1% |
Yearly Dividend0.06
Dividend Growth(5Y)-4.77%
DP1.36%
Div Incr Years0
Div Non Decr Years1
Ex-DateN/A
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)-1.15%
PT rev (3m)-4.79%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-30.68%
EPS NY rev (1m)0%
EPS NY rev (3m)-11.77%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-11.09%
Revenue NY rev (1m)-0.47%
Revenue NY rev (3m)-4.35%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.09 | ||
| Fwd PE | 11.39 | ||
| P/S | 1.02 | ||
| P/FCF | 19.67 | ||
| P/OCF | 12.82 | ||
| P/B | 2.06 | ||
| P/tB | 3.08 | ||
| EV/EBITDA | 11.95 |
EPS(TTM)5.48
EY7.1%
EPS(NY)6.78
Fwd EY8.78%
FCF(TTM)3.92
FCFY5.08%
OCF(TTM)6.02
OCFY7.8%
SpS75.37
BVpS37.47
TBVpS25.03
PEG (NY)0.59
PEG (5Y)1.79
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 | 2.75 |
F-Score5
WACC9.98%
ROIC/WACC0.72
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)-2.14%
EPS 3Y18.42%
EPS 5Y7.88%
EPS Q2Q%-16.25%
EPS Next Y23.69%
EPS Next 2Y17.31%
EPS Next 3Y14.13%
EPS Next 5Y10.19%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%-7.17%
Revenue Next Year6.43%
Revenue Next 2Y5.07%
Revenue Next 3Y5.26%
Revenue Next 5Y5.18%
EBIT growth 1Y7.72%
EBIT growth 3Y26.56%
EBIT growth 5Y-1.21%
EBIT Next Year24.39%
EBIT Next 3Y15.55%
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%