Private Jet Demand Continues to Drive Textron's Backlog

No-moat rated Textron closed 2021 with slightly depressed quarterly results as strong customer demand was not able to offset lower volumes. Sales declined 9.4% to $3.3 billion and earnings per share came in at $0.94. Both figures missed FactSet consensus, by 330 basis points and 140 basis points, respectively. The current demand environment, however, still looks very favorable for Textron’s aviation segment. Management announced 2022 revenue guidance at $13.3 billion and EPS guidance in a range of $3.80 to $4.00. After incorporating fourth-quarter results and updating our projections, we are increasing our fair value estimate to $49 from $47 per share to reflect a private jet demand surge over the next two years and Morningstar’s updated assumption that a corporate tax increase will not occur.