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Textron
(NYSE:TXT)
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Rating:69Neutral
Price Target:
$85.00
▲(3.91% Upside)
Action:Downgraded
Date:07/28/26
TXT scores in the high-60s primarily due to solid revenue scale and a manageable balance sheet, tempered by weakening free cash flow and cash conversion. Technicals are supportive with the stock trading above major moving averages, while valuation appears reasonable on the provided P/E and dividend yield. The latest earnings call reiterates guidance and highlights strong backlogs, but meaningful near-term execution and MV-75 funding timing risks keep the overall score in check.
Positive Factors
Strong multi-year aerospace and defense backlog
Backlogs totaling $18.8 billion across Aviation, Bell and Systems provide multi-year demand visibility and support production planning. This contracted demand can underpin revenue over the next several quarters, although conversion still depends on execution and program funding.
Negative Factors
Weakened cash generation and conversion
Lower free cash flow and weak conversion of reported earnings reduce internally generated financial flexibility. The pressure could constrain debt reduction, shareholder returns and investment capacity, while making execution setbacks more consequential over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong multi-year aerospace and defense backlog
Backlogs totaling $18.8 billion across Aviation, Bell and Systems provide multi-year demand visibility and support production planning. This contracted demand can underpin revenue over the next several quarters, although conversion still depends on execution and program funding.
Read all positive factors
Textron Key Performance Indicators (KPIs)
Any
Revenue by Geography
Sales broken down by region to show where demand is coming from and how exposed the company is to local economic cycles, trade policy, or currency moves. For Textron, international versus U.S. revenue highlights sensitivity of helicopter, aviation, and defense businesses to global markets and can explain swings in growth or margins.
Sales broken down by region to show where demand is coming from and how exposed the company is to local economic cycles, trade policy, or currency moves. For Textron, international versus U.S. revenue highlights sensitivity of helicopter, aviation, and defense businesses to global markets and can explain swings in growth or margins.
Data provided by:
The Fly
The FlyTextron (TXT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$13.29B
Dividend Yield0.1%
Average Volume (3M)1.76M
Price to Earnings (P/E)14.6
Beta (1Y)1.00
Revenue Growth8.80%
EPS Growth19.82%
CountryUS
Employees34,000
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)5.30
Shares Outstanding171,986,920
10 Day Avg. Volume1,827,153
30 Day Avg. Volume1,761,060
Financial Highlights & Ratios
PEG Ratio1.01
Price to Book (P/B)1.99
Price to Sales (P/S)1.06
P/FCF Ratio17.71
Enterprise Value/Market Cap1.41
Enterprise Value/Revenue1.23
Enterprise Value/Gross Profit7.44
Enterprise Value/Ebitda11.19
Forecast
1Y Price Target
$99.13Price Target Upside21.18% Upside
Rating ConsensusHold
Number of Analyst Covering8
EPS Forecast (FY)6.47
Revenue Forecast (FY)$15.59B
Textron Business Overview & Revenue Model
Company Description
Textron Inc. (TXT) is a diverse global enterprise with significant involvement in the aerospace, defense, industrial, and financial sectors. Its Textron Aviation division is responsible for the production, sale, and maintenance of a variety of air...
How the Company Makes Money
Textron makes money primarily by selling manufactured aircraft, defense systems, and specialized vehicles, and by providing high-margin aftermarket support over the life of those products. (1) Aircraft and rotorcraft sales: A significant portion o...
Textron Earnings Call Summary
Earnings Call Date:Jul 28, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call conveyed a generally positive operational and demand backdrop — revenue growth, strong backlogs across aviation, Bell and systems, key product milestones, and strategic progress toward becoming a pure-play aerospace & defense company. However, near-term execution and liquidity headwinds were emphasized: a sizable drop in manufacturing cash flow, manufacturing inefficiencies (especially in Aviation), supply‑chain and newer‑workforce productivity challenges, and funding timing risk for the MV‑75 program that could reduce EPS and cash flow if additional FY26 funds are not received. Management reiterated full‑year guidance while outlining concrete investments and steps to address execution gaps.Positive Updates
Consolidated Revenue Growth
Total revenues of $3.8 billion in Q2 2026, up 3% year-over-year (+$111 million). First half revenues up $500 million or 7% versus prior year.
Negative Updates
Manufacturing Cash Flow Decline
Manufacturing cash flow before pension contributions fell to $154 million in Q2 2026 from $336 million in Q2 2025 — a decline of $182 million (~54%), a notable cash generation deterioration.
Read all updates
Q2-2026 Updates
Positive
Negative
Consolidated Revenue Growth
Total revenues of $3.8 billion in Q2 2026, up 3% year-over-year (+$111 million). First half revenues up $500 million or 7% versus prior year.
Read all positive updates
Company Guidance
Textron reiterated full‑year guidance of adjusted EPS $6.40–$6.60 and manufacturing cash flow before pension contributions of $700M–$800M, noting that this outlook assumes receipt of the Army’s FY‑26 MV‑75 reprogramming request (~$350M); absent that funding adjusted EPS could be down $0.20–$0.30 and cash flow down $150M–$250M. Management is managing near‑term MV‑75 spending to a $350M cap while self‑funding work and expects a potential LRIP charge of $60M–$110M on contract exercise (Q4/Q1). They also said Q3 Aviation revenue cadence should resemble Q2 with margin improvement in Q4, cited an Aviation incremental margin target of ~20–25% and an estimated ~$150M (≈200 bps) profit opportunity from productivity gains, and left full‑year revenue broadly in line with prior outlook while noting segment puts‑and‑takes (Industrial likely above guide, Systems high‑side, Aviation potentially at the low end if ATR is not received).Textron Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
76
Positive
Cash Flow
58
Neutral
| Breakdown | TTM | Jan 2026 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 15.30B | 14.80B | 13.70B | 13.68B | 12.87B | 12.38B |
| Gross Profit | 2.52B | 2.69B | 2.50B | 2.85B | 2.67B | 2.08B |
| EBITDA | 1.68B | 1.66B | 1.42B | 1.56B | 1.52B | 1.41B |
| Net Income | 937.00M | 921.00M | 824.00M | 921.00M | 861.00M | 746.00M |
Balance Sheet | ||||||
| Total Assets | 18.13B | 18.13B | 16.84B | 16.86B | 16.29B | 15.83B |
| Cash, Cash Equivalents and Short-Term Investments | 1.61B | 2.02B | 1.44B | 2.18B | 2.04B | 2.12B |
| Total Debt | 3.81B | 4.28B | 3.96B | 4.25B | 3.94B | 4.15B |
| Total Liabilities | 10.08B | 10.25B | 9.63B | 9.87B | 9.18B | 9.01B |
| Stockholders Equity | 8.05B | 7.88B | 7.20B | 6.99B | 7.11B | 6.82B |
Cash Flow | ||||||
| Free Cash Flow | 759.00M | 884.00M | 864.00M | 864.00M | 1.22B | 451.00M |
| Operating Cash Flow | 1.24B | 1.27B | 1.27B | 1.27B | 1.60B | 768.00M |
| Investing Cash Flow | -417.00M | -351.00M | -317.00M | -317.00M | -281.00M | -248.00M |
| Financing Cash Flow | -642.00M | -1.25B | -813.00M | -813.00M | -1.45B | 360.00M |
Textron Technical Analysis
Negative
81.80
Price Trends
83.14
Negative
87.03
Negative
89.57
Negative
Market Momentum
-1.74
Negative
38.40
Neutral
28.21
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TXT, the sentiment is Negative. The current price of 81.8 is above the 20-day moving average (MA) of 78.68, below the 50-day MA of 83.14, and below the 200-day MA of 89.57, indicating a bearish trend. The MACD of -1.74 indicates Negative momentum. The RSI at 38.40 is Neutral, neither overbought nor oversold. The STOCH value of 28.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TXT.
Textron Risk Analysis
Textron disclosed 26 risk factors in its most recent earnings report. Textron reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Textron Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $89.31B | 19.85 | 17.43% | 1.87% | 9.13% | 10.37% | |
74 Outperform | $67.91B | 15.16 | 26.58% | 2.00% | 5.90% | 16.00% | |
70 Outperform | $116.64B | 18.55 | 86.24% | 2.73% | 7.20% | 52.79% | |
69 Neutral | $13.29B | 14.58 | 11.93% | 0.10% | 8.80% | 19.82% | |
69 Neutral | $44.06B | 23.76 | 9.41% | 2.09% | 7.29% | 10.75% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
49 Neutral | $152.98B | 72.49 | 104.83% | 2.40% | 24.78% | ― |
* Industrials Sector Average
TXT
Textron
77.26
-10.00
-11.46%
BA
Boeing
193.56
-26.17
-11.91%
GD
General Dynamics
330.09
-10.40
-3.06%
LHX
L3Harris Technologies
236.60
-61.46
-20.62%
LMT
Lockheed Martin
505.41
4.12
0.82%
NOC
Northrop Grumman
478.00
-130.60
-21.46%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.