Textron
TXT
$82.35
-1.15%
Textron, Inc. is a diversified conglomerate that designs, manufactures, and services a broad range of aerospace and defense products, including business jets, turboprop aircraft, helicopters, tilt-rotor aircraft, and uncrewed systems, along with specialized vehicles and industrial products. As a leading player in the aerospace and defense industry, Textron is distinguished by its iconic brands such as Cessna, Beechcraft, and Bell, which command strong market positions in their respective segments. The current investor narrative centers on Textron's strategic pivot to become a pure-play, higher-growth aerospace and defense company, following strong Q1 results and a focus on streamlining its portfolio. This transformation, coupled with robust demand for its defense and commercial aircraft, is driving attention and debate around the stock's future growth trajectory and margin expansion potential.…
TXT
Textron
$82.35
Related headlines
Investment Opinion: Should I buy TXT Today?
We rate Textron as a Hold. The consensus is a Buy with an average target of $101.89, implying 22.8% upside, but the recent price action and margin deterioration warrant caution. The thesis is that the stock is undervalued on forward earnings, but the margin decline and decelerating growth create uncertainty.
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TXT 12-Month Price Forecast
The AI assessment is neutral with medium confidence. The low forward PE suggests value, but the margin collapse and negative price momentum are concerning. The stock is likely to trade in a range until margins stabilize. If margins recover, the stock could re-rate higher; if not, it may continue to decline. Key factors to watch are quarterly margin trends and revenue growth sustainability.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Textron's 12-month outlook, with a consensus price target around $102.07 and implied upside of +23.9% versus the current price.
Average Target
$102.07
0 analysts
Implied Upside
+23.9%
vs. current price
Analyst Count
—
covering this stock
Price Range
$92 - $115
Analyst target range
The target price range spans from a low of $92.00 to a high of $115.00, indicating a wide spread of $23.00, which reflects significant uncertainty about the company's future performance. The high target of $115.00 implies a potential upside of 38.6% from the current price, likely assuming successful execution of the pure-play aerospace and defense strategy and robust defense spending. The low target of $92.00 suggests a more conservative outlook, possibly factoring in risks such as supply chain disruptions, margin compression, or a slowdown in commercial aviation demand. The wide range highlights the divergent views among analysts, with some being highly optimistic and others more cautious, which is typical for a company undergoing strategic transformation.
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Bulls vs Bears: TXT Investment Factors
Textron presents a mixed picture: strong revenue growth and a strategic pivot are offset by margin compression and a significant price downtrend. The bull case rests on the low forward PE and analyst upside, while the bear case highlights deteriorating margins and decelerating growth. Currently, the bearish evidence is stronger given the margin collapse and negative price momentum, but the low forward valuation provides a margin of safety. The key tension is whether the margin decline is temporary (due to supply chain issues) or structural, which will determine if the stock is a value trap or a turnaround opportunity.
Bullish
- Strong Revenue Growth: Q1 2026 revenue grew 11.77% YoY to $3.695 billion, driven by robust demand in Textron Aviation and Bell segments. This growth outpaces the broader industrials sector and supports the company's strategic pivot.
- Attractive Forward Valuation: The forward PE of 11.42x is significantly below the trailing PE of 17.04x, implying the market expects substantial earnings growth. This low multiple relative to growth prospects suggests potential upside.
- Analyst Consensus Buy: With 16 analysts, the consensus rating is 'buy' and the average target price is $101.89, representing a 22.8% upside from the current price of $82.95. The high target of $115 implies a 38.6% upside.
- Solid Balance Sheet: Debt-to-equity is a manageable 0.54, and the current ratio of 1.84 indicates strong liquidity. This financial stability provides flexibility for investments and weathering downturns.
Bearish
- Significant Price Downtrend: The stock has fallen 17.7% over the past six months, underperforming the S&P 500 by 28.8 percentage points. This persistent selling pressure suggests negative sentiment and potential further downside.
- Margin Compression: Gross margin in Q1 2026 was only 8.66%, down from 19.18% in Q1 2025, a dramatic decline. This indicates cost pressures or product mix issues that could erode profitability.
- Decelerating Growth: While revenue grew 11.77% YoY in Q1, this is a sharp deceleration from the 26.1% YoY growth in Q4 2024. The slowdown suggests the post-pandemic boom is fading.
- Wide Analyst Target Range: The analyst target range spans from $92 to $115, a $23 spread, indicating high uncertainty about future performance. This divergence reflects risks in execution and market conditions.
TXT Technical Analysis
Textron's stock has been in a clear downtrend over the past six months, with the price declining from a 52-week high of $101.57 to a current price of $82.95, representing a 17.7% drop over the six-month period. The stock is currently trading at approximately 82% of its 52-week range (calculated as (82.95 - 78.12) / (101.57 - 78.12)), indicating it is closer to the lower end of its annual range. This positioning suggests that the stock is experiencing significant selling pressure, and the proximity to the 52-week low of $78.12 raises concerns about further downside, though it may also present a value opportunity for contrarian investors if the fundamentals remain intact.
Beta
0.91
0.91x market volatility
Max Drawdown
-18.8%
Largest decline past year
52-Week Range
$78-$102
Price range past year
Annual Return
+0.6%
Cumulative gain past year
| Period | TXT Return | S&P 500 |
|---|---|---|
| 1m | -8.5% | +4.1% |
| 3m | -10.3% | +1.9% |
| 6m | -16.5% | +12.4% |
| 1y | +0.6% | +19.3% |
| ytd | -5.4% | +13.1% |
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TXT Fundamental Analysis
Textron's revenue has shown a positive trajectory, with the most recent quarter (Q1 2026) reporting revenue of $3.695 billion, a 11.77% year-over-year increase from $3.306 billion in Q1 2025. This growth is driven by strong performance across its segments, particularly Textron Aviation ($1.485 billion) and Bell ($1.070 billion), which together account for the majority of revenue. The company's revenue growth has been consistent, with Q4 2025 revenue of $4.175 billion and Q3 2025 revenue of $3.602 billion, indicating a steady upward trend. However, the growth rate has decelerated from the 26.1% YoY growth seen in Q4 2024, suggesting a normalization after a period of rapid expansion.
Quarterly Revenue
$3.7B
2026-04
Revenue YoY Growth
+11.8%
YoY Comparison
Gross Margin
8.7%
Latest Quarter
Free Cash Flow
$707000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is TXT Overvalued?
Given that Textron has positive net income, the primary valuation metric selected is the price-to-earnings (PE) ratio. The trailing PE ratio is 17.04x, while the forward PE ratio is 11.42x, indicating that the market expects significant earnings growth in the coming year. This gap between trailing and forward PE suggests that analysts anticipate a substantial improvement in profitability, which could be driven by the company's strategic pivot and operational efficiencies. The forward PE of 11.42x is notably lower than the trailing PE, implying that the market is pricing in a strong earnings rebound, which may be optimistic given the current economic uncertainties.
PE
17.0x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 13x~25x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
10.9x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are elevated. The most concerning is the dramatic gross margin decline from 19.2% in Q1 2025 to 8.7% in Q1 2026, which could indicate cost inflation, pricing pressure, or unfavorable product mix. Operating margin also fell to 6.1% from 6.2% YoY, and net income margin dropped to 6.0% from 6.3%. While debt-to-equity is moderate at 0.54, the company's free cash flow of $707 million TTM is relatively low compared to its market cap, limiting financial flexibility. Revenue concentration in aviation and defense segments exposes it to cyclicality in business jet demand and government budget changes.
