TEXTRON INC (TXT) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TXT - US8832031012 - Common Stock
95 USD
-1.03 (-1.07%)
94.7 USD
-0.3 (-0.32%)
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
- TXT had positive earnings in the past year.
- TXT had a positive operating cash flow in the past year.
- In the past 5 years TXT has always been profitable.
- Each year in the past 5 years TXT had a positive operating cash flow.
1.2 Ratios
- TXT's Return On Assets of 4.76% is fine compared to the rest 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.
- With a Return On Invested Capital value of 6.29%, TXT perfoms like the industry average, outperforming 54.79% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital 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
- The Profit Margin of TXT (5.81%) is better than 61.64% of its industry peers.
- In the last couple of years the Profit Margin of TXT has remained more or less at the same level.
- The Operating Margin of TXT (6.57%) is comparable to the rest of the industry.
- TXT's Operating Margin has declined in the last couple of years.
- TXT has a Gross Margin (20.62%) which is comparable to the rest of the industry.
- TXT's Gross Margin has improved in the last couple of years.
| 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
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), TXT is destroying value.
- TXT has less shares outstanding than it did 1 year ago.
- 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 2.75. 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.
- TXT has a Altman-Z score of 2.75. This is in the lower half of the industry: TXT underperforms 63.01% of its industry peers.
- 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.
- Looking at the Debt to FCF ratio, with a value of 5.37, TXT is in the better half of the industry, outperforming 68.49% of the companies in the same industry.
- A Debt/Equity ratio of 0.45 indicates that TXT is not too dependend on debt financing.
- TXT has a Debt to Equity ratio (0.45) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 5.37 | ||
| Altman-Z | 2.75 |
ROIC/WACC0.66
WACC9.51%
2.3 Liquidity
- A Current Ratio of 1.71 indicates that TXT should not have too much problems paying its short term obligations.
- With a Current ratio value of 1.71, TXT is not doing good in the industry: 65.75% of the companies in the same industry are doing better.
- A Quick Ratio of 0.73 indicates that TXT may have some problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 0.73, TXT is doing worse than 83.56% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.71 | ||
| Quick Ratio | 0.73 |
3. Growth
3.1 Past
- The earnings per share for TXT have decreased by -0.35% in the last year.
- Measured over the past 5 years, TXT shows a small growth in Earnings Per Share. The EPS has been growing by 7.88% on average per year.
- Looking at the last year, TXT shows a small growth in Revenue. The Revenue has grown by 1.83% in the last year.
- The Revenue has been growing slightly by 0.11% on average over the past years.
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
- The Earnings Per Share is expected to grow by 11.64% on average over the next years. This is quite good.
- Based on estimates for the next years, TXT will show a small growth in Revenue. The Revenue will grow by 3.72% on average per year.
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
- 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
- Based on the Price/Earnings ratio of 16.61, the valuation of TXT can be described as correct.
- 98.63% of the companies in the same industry are more expensive than TXT, based on the Price/Earnings ratio.
- TXT's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.21.
- The Price/Forward Earnings ratio is 13.80, which indicates a correct valuation of TXT.
- TXT's Price/Forward Earnings ratio is rather cheap when compared to the industry. TXT is cheaper than 98.63% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of TXT to the average of the S&P500 Index (24.26), we can say TXT is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.61 | ||
| Fwd PE | 13.8 |
4.2 Price Multiples
- 93.15% of the companies in the same industry are more expensive than TXT, based on the Enterprise Value to EBITDA ratio.
- Based on the Price/Free Cash Flow ratio, TXT is valued cheaper than 95.89% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.09 | ||
| EV/EBITDA | 14.42 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.35
PEG (5Y)2.11
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.
- Compared to an average industry Dividend Yield of 0.34, TXT pays a bit more dividend than its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, TXT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.08% |
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
- 1.81% of the earnings are spent on dividend by TXT. This is a low number and 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 16.61 and the Price/Book (PB) ratio is 2.23.
Can you provide the financial health for TXT stock?
The financial health rating of TEXTRON INC (TXT) is 4 / 10.