TEXTRON INC (TXT) Stock Fundamental Analysis
USA - NYSE:TXT - US8832031012 - Common Stock
86.85 USD
+0.5 (+0.58%)
86.95 USD
+0.1 (+0.12%)
Taking everything into account, TXT scores 5 out of 10 in our fundamental rating. TXT was compared to 69 industry peers in the Aerospace & Defense industry. Both the profitability and the financial health of TXT get a neutral evaluation. Nothing too spectacular is happening here. 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.
Each year in the past 5 years TXT has been profitable.
Each year in the past 5 years TXT had a positive operating cash flow.
1.2 Ratios
TXT has a better Return On Assets (4.78%) than 65.22% of its industry peers.
TXT has a Return On Equity of 10.98%. This is in the better half of the industry: TXT outperforms 73.91% of its industry peers.
TXT has a Return On Invested Capital of 5.87%. This is comparable to the rest of the industry: TXT outperforms 53.62% of its industry peers.
The Average Return On Invested Capital over the past 3 years for TXT is in line with the industry average of 8.29%.
| 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
TXT's Profit Margin of 5.80% is fine compared to the rest of the industry. TXT outperforms 63.77% of its industry peers.
TXT's Profit Margin has been stable in the last couple of years.
TXT has a Operating Margin (6.16%) which is in line with its industry peers.
In the last couple of years the Operating Margin of TXT has declined.
With a Gross Margin value of 19.73%, TXT is not doing good in the industry: 63.77% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of TXT has grown nicely.
| 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.
TXT has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, TXT has less shares outstanding
The debt/assets ratio for TXT has been reduced compared to a year ago.
2.2 Solvency
TXT has an Altman-Z score of 2.66. 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 2.66, TXT is in line with its industry, outperforming 42.03% of the companies in the same industry.
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 65.22% of the companies in the same industry.
A Debt/Equity ratio of 0.45 indicates that TXT is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.45, TXT perfoms like the industry average, outperforming 55.07% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 6.68 | ||
| Altman-Z | 2.66 |
ROIC/WACC0.62
WACC9.43%
2.3 Liquidity
TXT has a Current Ratio of 1.70. This is a normal value and indicates that TXT is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.70, TXT is doing worse than 60.87% of the companies in the same industry.
TXT has a Quick Ratio of 1.70. This is a bad value and indicates that TXT is not financially healthy enough and could expect problems in meeting its short term obligations.
TXT has a Quick ratio of 0.71. This is amonst the worse of the industry: TXT underperforms 82.61% 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.
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 1.19%.
The Revenue has been growing slightly by 0.11% on average over the past years.
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
The Earnings Per Share is expected to grow by 10.97% 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 3.86% on average per year.
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
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
With a Price/Earnings ratio of 15.59, TXT is valued correctly.
Compared to the rest of the industry, the Price/Earnings ratio of TXT indicates a rather cheap valuation: TXT is cheaper than 98.55% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.86. TXT is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 12.44, the valuation of TXT can be described as correct.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TXT indicates a rather cheap valuation: TXT is cheaper than 95.65% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.32. TXT is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.59 | ||
| Fwd PE | 12.44 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TXT indicates a rather cheap valuation: TXT is cheaper than 92.75% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TXT indicates a rather cheap valuation: TXT is cheaper than 86.96% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.69 | ||
| EV/EBITDA | 14.02 |
4.3 Compensation for Growth
The 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)1.23
PEG (5Y)1.98
EPS Next 2Y12.88%
EPS Next 3Y12.11%
5. Dividend
5.1 Amount
TXT has a yearly dividend return of 0.09%, which is pretty low.
Compared to an average industry Dividend Yield of 1.44, TXT pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.41, TXT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.09% |
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%
86.85
+0.5 (+0.58%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners89.03%
Inst Owner Change1.9%
Ins Owners0.52%
Ins Owner Change1.91%
Market Cap15.48B
Analysts74
Price Target92.73 (6.77%)
Short Float %2.62%
Short Ratio3.01
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.09% |
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)0%
PT rev (3m)5.93%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-7.32%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.18%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.13%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.59 | ||
| Fwd PE | 12.44 | ||
| P/S | 1.1 | ||
| P/FCF | 27.69 | ||
| P/OCF | 16.88 | ||
| P/B | 2.08 | ||
| P/tB | 3.03 | ||
| EV/EBITDA | 14.02 |
EPS(TTM)5.57
EY6.41%
EPS(NY)6.98
Fwd EY8.04%
FCF(TTM)3.14
FCFY3.61%
OCF(TTM)5.15
OCFY5.92%
SpS78.91
BVpS41.71
TBVpS28.7
PEG (NY)1.23
PEG (5Y)1.98
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 | 2.66 |
F-Score6
WACC9.43%
ROIC/WACC0.62
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%