TEXTRON INC (TXT)
US8832031012 - Common Stock
Overall TXT gets a fundamental rating of 5 out of 10. We evaluated TXT against 64 industry peers in the Aerospace & Defense industry. There are concerns on the financial health of TXT while its profitability can be described as average. 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.
In the past year TXT had a positive cash flow from operations.
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 (5.46%) is better than 70.31% of its industry peers.
Looking at the Return On Equity, with a value of 13.18%, TXT is in the better half of the industry, outperforming 78.13% of the companies in the same industry.
With a decent Return On Invested Capital value of 7.12%, TXT is doing good in the industry, outperforming 70.31% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for TXT is below the industry average of 8.57%.
The last Return On Invested Capital (7.12%) for TXT is above the 3 year average (6.26%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.46% | ||
| ROE | 13.18% | ||
| ROIC | 7.12% |
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 has a better Profit Margin (6.73%) than 70.31% of its industry peers.
TXT's Profit Margin has declined in the last couple of years.
TXT's Operating Margin of 7.65% is fine compared to the rest of the industry. TXT outperforms 64.06% of its industry peers.
TXT's Operating Margin has been stable in the last couple of years.
The Gross Margin of TXT (14.60%) is worse than 70.31% of its industry peers.
In the last couple of years the Gross Margin of TXT has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.65% | ||
| PM (TTM) | 6.73% | ||
| GM | 14.6% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so TXT is destroying value.
TXT has less shares outstanding than it did 1 year ago.
TXT has less shares outstanding than it did 5 years ago.
TXT has a worse debt/assets ratio than last year.
2.2 Solvency
The Debt to FCF ratio of TXT is 4.56, which is a neutral value as it means it would take TXT, 4.56 years of fcf income to pay off all of its debts.
TXT has a Debt to FCF ratio of 4.56. This is in the better half of the industry: TXT outperforms 78.13% of its industry peers.
TXT has a Debt/Equity ratio of 0.51. This is a neutral value indicating TXT is somewhat dependend on debt financing.
TXT has a Debt to Equity ratio (0.51) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | 4.56 | ||
| Altman-Z | N/A |
ROIC/WACC0.8
WACC8.95%
2.3 Liquidity
A Current Ratio of 1.77 indicates that TXT should not have too much problems paying its short term obligations.
TXT's Current ratio of 1.77 is in line compared to the rest of the industry. TXT outperforms 48.44% of its industry peers.
TXT has a Quick Ratio of 1.77. 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 0.88. This is in the lower half of the industry: TXT underperforms 68.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.77 | ||
| Quick Ratio | 0.88 |
3. Growth
3.1 Past
TXT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 39.65%, which is quite impressive.
Measured over the past years, TXT shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.82% on average per year.
TXT shows a small growth in Revenue. In the last year, the Revenue has grown by 6.33%.
The Revenue has been decreasing by -0.42% on average over the past years.
EPS 1Y (TTM)39.65%
EPS 3Y39.34%
EPS 5Y10.82%
EPS growth Q2Q49.53%
Revenue 1Y (TTM)6.33%
Revenue growth 3Y5.5%
Revenue growth 5Y-0.42%
Revenue growth Q2Q7.04%
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 11.11% on average per year.
TXT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.44% yearly.
EPS Next Y13.82%
EPS Next 2Y10.66%
EPS Next 3Y10.69%
EPS Next 5Y11.11%
Revenue Next Year6.86%
Revenue Next 2Y5.84%
Revenue Next 3Y5.08%
Revenue Next 5Y5.44%
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 stable.
When comparing the Revenue 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
With a Price/Earnings ratio of 15.44, TXT is valued correctly.
Based on the Price/Earnings ratio, TXT is valued cheaper than 95.31% of the companies in the same industry.
TXT is valuated rather cheaply when we compare the Price/Earnings ratio to 25.20, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 13.56, which indicates a correct valuation of TXT.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TXT indicates a rather cheap valuation: TXT is cheaper than 96.88% of the companies listed in the same industry.
TXT's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.63.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.44 | ||
| Fwd PE | 13.56 |
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 85.94% of the companies listed in the same industry.
90.63% of the companies in the same industry are more expensive than TXT, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.25 | ||
| EV/EBITDA | 12.59 |
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 has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.12
PEG (5Y)1.43
EPS Next 2Y10.66%
EPS Next 3Y10.69%
5. Dividend
5.1 Amount
TXT has a yearly dividend return of 0.09%, which is pretty low.
TXT's Dividend Yield is a higher than the industry average which is at 1.36.
Compared to an average S&P500 Dividend Yield of 2.44, 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 has a limited annual growth rate of 0.18%.
TXT has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)0.18%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
1.74% of the earnings are spent on dividend by TXT. This is a low number and sustainable payout ratio.
The dividend of TXT is growing, but earnings are growing more, so the dividend growth is sustainable.
DP1.74%
EPS Next 2Y10.66%
EPS Next 3Y10.69%
TEXTRON INC
NYSE:TXT (4/26/2024, 1:44:00 PM)
86.46
+1.56 (+1.84%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap16.63B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.09% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.44 | ||
| Fwd PE | 13.56 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.12
PEG (5Y)1.43
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.46% | ||
| ROE | 13.18% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 7.65% | ||
| PM (TTM) | 6.73% | ||
| GM | 14.6% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.81
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.77 | ||
| Quick Ratio | 0.88 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)39.65%
EPS 3Y39.34%
EPS 5Y
EPS growth Q2Q
EPS Next Y13.82%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)6.33%
Revenue growth 3Y5.5%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y