NYSE:TXT

Stock Analysis Report

Executive Summary

Textron Inc. operates in the aircraft, defense, industrial, and finance businesses worldwide.


Snowflake Analysis

Undervalued with adequate balance sheet.


Similar Companies

Share Price & News

How has Textron's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TXT has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.1%

TXT

0.3%

US Aerospace & Defense

-1.3%

US Market


1 Year Return

-15.0%

TXT

35.0%

US Aerospace & Defense

22.0%

US Market

Return vs Industry: TXT underperformed the US Aerospace & Defense industry which returned 37.9% over the past year.

Return vs Market: TXT underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

TXTIndustryMarket
7 Day-3.1%0.3%-1.3%
30 Day-0.8%6.1%1.8%
90 Day-5.4%9.9%9.3%
1 Year-14.9%-15.0%37.5%35.0%24.6%22.0%
3 Year-6.0%-6.4%60.2%51.6%49.2%39.6%
5 Year5.9%5.0%107.0%87.3%77.9%58.3%

Price Volatility Vs. Market

How volatile is Textron's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Textron undervalued compared to its fair value and its price relative to the market?

37.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TXT ($45.35) is trading below our estimate of fair value ($68.14)

Significantly Below Fair Value: TXT is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: TXT is good value based on its PE Ratio (12.3x) compared to the Aerospace & Defense industry average (20.7x).

PE vs Market: TXT is good value based on its PE Ratio (12.3x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: TXT is poor value based on its PEG Ratio (6.1x)


Price to Book Ratio

PB vs Industry: TXT is good value based on its PB Ratio (1.9x) compared to the US Aerospace & Defense industry average (2.7x).


Next Steps

Future Growth

How is Textron forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

2.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TXT's forecast earnings growth (2% per year) is above the savings rate (1.7%).

Earnings vs Market: TXT's earnings (2% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: TXT's earnings are forecast to grow, but not significantly.

Revenue vs Market: TXT's revenue (3.5% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: TXT's revenue (3.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TXT's Return on Equity is forecast to be low in 3 years time (13.8%).


Next Steps

Past Performance

How has Textron performed over the past 5 years?

9.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TXT has high quality earnings.

Growing Profit Margin: TXT's current net profit margins (6.5%) are higher than last year (6.1%).


Past Earnings Growth Analysis

Earnings Trend: TXT's earnings have grown by 9.5% per year over the past 5 years.

Accelerating Growth: TXT's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: TXT had negative earnings growth (-0.4%) over the past year, making it difficult to compare to the Aerospace & Defense industry average (13.9%).


Return on Equity

High ROE: TXT's Return on Equity (15.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Textron's financial position?


Financial Position Analysis

Short Term Liabilities: TXT's short term assets ($8.1B) exceed its short term liabilities ($3.8B).

Long Term Liabilities: TXT's short term assets ($8.1B) exceed its long term liabilities ($5.8B).


Debt to Equity History and Analysis

Debt Level: TXT's debt to equity ratio (75%) is considered high.

Reducing Debt: TXT's debt to equity ratio has reduced from 86.9% to 75% over the past 5 years.

Debt Coverage: TXT's debt is not well covered by operating cash flow (15.5%).

Interest Coverage: TXT's interest payments on its debt are well covered by EBIT (8.5x coverage).


Balance Sheet

Inventory Level: TXT has a high level of physical assets or inventory.

Debt Coverage by Assets: TXT's debt is covered by short term assets (assets are 2x debt).


Next Steps

Dividend

What is Textron's current dividend yield, its reliability and sustainability?

0.18%

Current Dividend Yield


Dividend Yield vs Market

company0.2%marketbottom25%1.4%markettop25%3.7%industryaverage1.7%forecastin3Years0.2%

Current dividend yield vs market & industry

Notable Dividend: TXT's dividend (0.18%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: TXT's dividend (0.18%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: TXT is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: TXT is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: TXT is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of TXT's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Textron's salary, the management and board of directors tenure and is there insider trading?

4.3yrs

Average management tenure


CEO

Scott Donnelly (57yo)

10.1yrs

Tenure

US$13,948,917

Compensation

Mr. Scott C. Donnelly has been the Chairman, Chief Executive Officer and President of Textron Inc. since September 1, 2010, December 1, 2009 and January 2009 respectively. Mr. Donnelly serves Co-President  ...


CEO Compensation Analysis

Compensation vs Market: Scott's total compensation ($USD13.95M) is about average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: Scott's compensation has been consistent with company performance over the past year.


Management Age and Tenure

4.3yrs

Average Tenure

57yo

Average Age

Experienced Management: TXT's management team is considered experienced (4.3 years average tenure).


Board Age and Tenure

10.6yrs

Average Tenure

69.5yo

Average Age

Experienced Board: TXT's board of directors are seasoned and experienced ( 10.6 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Scott Donnelly (57yo)

    Chairman

    • Tenure: 10.1yrs
    • Compensation: US$13.95m
  • Frank Connor (59yo)

    Executive VP & CFO

    • Tenure: 10.4yrs
    • Compensation: US$5.21m
  • Ee Soon-Kiong

    President of Textron China

    • Tenure: 16.8yrs
  • Eric Salander

    Vice President of Investor Relations & Treasurer

    • Tenure: 3.1yrs
  • Bob Lupone (59yo)

    Executive VP

    • Tenure: 7.9yrs
    • Compensation: US$2.81m
  • James Takats

    Senior Vice President of Global Simulation & Training Strategy TRU Simulation + Training Inc

    • Tenure: 4.3yrs
  • Julie Duffy (53yo)

    Executive Vice President of Human Resources

    • Tenure: 2.5yrs
    • Compensation: US$1.65m
  • Mark Bamford (55yo)

    VP, Corporate Controller & Principal Accounting Officer

    • Stewart Holmes

      Senior Vice President of Washington Operations

      • Tenure: 2.8yrs
    • Kimberly Mackenroth

      Vice President & Chief Information Officer

      • Tenure: 2yrs

    Board Members

    • Kathleen Bader (68yo)

      Independent Director

      • Tenure: 16yrs
      • Compensation: US$292.06k
    • Lloyd Trotter (73yo)

      Independent Director

      • Tenure: 11.8yrs
      • Compensation: US$285.84k
    • Scott Donnelly (57yo)

      Chairman

      • Tenure: 10.1yrs
      • Compensation: US$13.95m
    • Jim Ziemer (69yo)

      Independent Director

      • Tenure: 12.8yrs
      • Compensation: US$276.66k
    • Larry Fish (74yo)

      Independent Director

      • Tenure: 21yrs
      • Compensation: US$268.75k
    • Paul Gagné (72yo)

      Lead Director

      • Tenure: 1.8yrs
      • Compensation: US$295.44k
    • Ralph Heath (70yo)

      Independent Director

      • Tenure: 3yrs
      • Compensation: US$275.00k
    • Ronal Clark (66yo)

      Independent Director

      • Tenure: 16.3yrs
      • Compensation: US$297.50k
    • James Conway (71yo)

      Independent Director

      • Tenure: 8.8yrs
      • Compensation: US$283.50k
    • Maria Zuber (61yo)

      Independent Director

      • Tenure: 3.2yrs
      • Compensation: US$260.00k

    Company Information

    Textron Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Textron Inc.
    • Ticker: TXT
    • Exchange: NYSE
    • Founded: 1923
    • Industry: Aerospace and Defense
    • Sector: Capital Goods
    • Market Cap: US$10.295b
    • Shares outstanding: 228.26m
    • Website: https://www.textron.com

    Number of Employees


    Location

    • Textron Inc.
    • 40 Westminster Street
    • Providence
    • Rhode Island
    • 2903
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    TXTNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
    TXTDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
    TXT *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
    0LF0LSE (London Stock Exchange)YesCommon StockGBUSDJan 1968

    Biography

    Textron Inc. operates in the aircraft, defense, industrial, and finance businesses worldwide. The company’s Textron Aviation segment manufactures and sells business jets, turboprop and piston engine aircraft, and military trainer and defense aircraft; and commercial parts, as well as provides maintenance, inspection, and repair services. Its Bell segment provides military and commercial helicopters, tiltrotor aircraft, and related spare parts and services. The company’s Textron Systems segment offers unmanned, marine, and land systems; simulation, training, and other defense and aviation mission support products and systems; airborne and ground-based sensors and surveillance systems, and protection systems; precision guided weapons systems; armored vehicles, turrets, and related subsystems, as well as marine craft; test equipment and electronic warfare test, and training solutions; piston aircraft engines; and intelligence software solutions. This segment also designs, develops, manufactures, installs, and maintains full flight simulators; and offers logistics support services. Its Industrial segment offers blow-molded plastic fuel systems and fuel systems, including pressurized fuel tanks for hybrid applications, clear-vision systems, catalytic reduction systems, cast iron engine components, and other fuel system components primarily to automobile OEMs, as well as plastic bottles and containers for various uses; golf cars, off-road utility vehicles, recreational side-by-side and all-terrain vehicles, snowmobiles, light transportation vehicles, aviation ground support equipment, professional turf-maintenance equipment, and turf-care vehicles that are marketed to golf courses and resorts, government agencies and municipalities, consumers, and commercial and industrial users. The company’s Finance segment provides financing to purchase new and pre-owned aircraft and helicopters. Textron Inc. was founded in 1923 and is headquartered in Providence, Rhode Island.  


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/24 23:56
    End of Day Share Price2020/01/24 00:00
    Earnings2019/09/28
    Annual Earnings2018/12/29


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.