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Providence, Rhode Island-based Textron Inc. (TXT) is a diversified multi-industry company with a strong presence in the aerospace, defense, and industrial sectors. Valued at a market cap of $13.8 billion, the company’s portfolio includes commercial and military helicopters, light- and mid-size business jets, plastic fuel tanks, automotive trim products, golf carts and utility vehicles, turf-care equipment, industrial pumps and gears, engineered fastening systems, and various other specialized industrial products.
This aerospace and defense company has underperformed the broader market over the past 52 weeks. Shares of TXT have fallen 12.4% over this time frame, while the broader S&P 500 Index ($SPX) has gained 12.5%. Moreover, on a YTD basis, the stock is up marginally, compared to SPX’s 1.3% return.
Narrowing the focus, TXT has also considerably lagged behind the iShares U.S. Aerospace & Defense ETF’s (ITA) 27.4% rise over the past 52 weeks and 18.3% uptick on a YTD basis.
On Apr. 24, shares of TXT closed up 2.6% after it delivered better-than-expected Q1 adjusted earnings of $1.28 per share and revenue of $3.3 billion. Moreover, compared to the same quarter last year, its top line improved 5.5%, while its adjusted EPS grew 6.7%. Strong growth in its bell segment's revenue, driven by strength in both military and commercial product lines, aided the results. Looking ahead, TXT reaffirmed its fiscal 2025 adjusted EPS guidance in the range of $6 to $6.20.
For the current fiscal year, ending in December, analysts expect Textron’s EPS to grow 11.7% year over year to $6.12. The company’s earnings surprise history is mixed. It topped the consensus estimates in three of the last four quarters, while missing on another occasion.
Among the 14 analysts covering the stock, the consensus rating is a “Moderate Buy” which is based on seven “Strong Buy,” six “Hold,” and one “Strong Sell” rating.
The configuration has remained consistent over the past three months.
On Apr. 29, Barclays PLC (BCS) analyst David E. Strauss maintained a “Buy” rating on Textron and set a price target of $95, which indicates a 23.9% potential upside from the current levels.
The mean price target of $85.71 represents an 11.8% premium from TXT’s current price levels, while the Street-high price target of $107 suggests a notable upside potential of 39.5%.
