Company Reports

No-moat-rated Textron missed FactSet consensus expectations for both revenue and earnings per share in the first quarter of 2024, with demand softening in its industrial segment. Revenue was up 4% year over year to $3.1 billion, although below consensus estimates of $3.3 billion. Disappointed investors drove the shares down around 11% after market open. After factoring in first-quarter results and adjusting our forecast for margins in the underperforming industrials segment, we adjusted our fair value estimate to $84 from $86.

Textron is not a household name, but many of its products are: from Cessna airplanes to Bell helicopters and E-Z-Go golf carts, the company designs, produces, and services a wide array of specialized vehicles, overwhelmingly aircraft, for commercial and military customers. In some of its key markets, Textron products are far and away the most common version in use today, and part of the company's strategy is to provide ongoing service and parts for its back catalog of vehicles. Aircraft are generally fairly long-lived, often in use for decades, and this provides Textron with many years of recurring revenue streams, though its heavy exposure to business and private aviation makes those revenue streams quite cyclical.

No-moat-rated Textron posted solid fourth-quarter results to close out 2023 as revenue for the quarter was up 7% year over year, although just below consensus expectations. Management announced 2024 full-year revenue guidance of $14.6 billion, which represents an overall 7% increase from 2023 revenue of $13.7 billion. After factoring in fourth-quarter results, our $86 fair value estimate remains unchanged.

Three branches of the U.S. military grounded their fleet of more than 400 V-22 Osprey rotorcraft following the investigation into the crash of an Air Force Special Operations Osprey in Japan on Nov. 29 that killed eight servicemen. Because the investigation indicated possible mechanical issues, though the root cause has not yet been determined, the decision to ground the fleet seems merited in the name of caution.

No-moat-rated Textron posted solid operating results, growing revenue 8.6% year over year and increasing its full-year earnings guidance by $0.25. Textron’s Aviation business had a particularly strong quarter, growing almost 15% year over year, and discussed its sizable new purchase agreement from NetJets.

Textron is not a household name, but many of its products are: from Cessna airplanes to Bell helicopters and E-Z-Go golf carts, the company designs, produces, and services a wide array of specialized vehicles, overwhelmingly aircraft, for commercial and military customers. In some of its key markets, Textron products are far and away the most common version in use today, and part of the company's strategy is to provide ongoing service and parts for its back catalog of vehicles. Aircraft are generally fairly long-lived, often in use for decades, and this provides Textron with many years of recurring revenue streams, though its heavy exposure to business and private aviation makes those revenue streams quite cyclical.

Textron is not a household name, but many of its products are: from Cessna airplanes to Bell helicopters and E-Z-Go golf carts, the company designs, produces, and services a wide array of specialized vehicles, overwhelmingly aircraft, for commercial and military customers. In some of its key markets, Textron products are far and away the most common version in use today, and part of the company's strategy is to provide ongoing service and parts for its back catalog of vehicles. Aircraft are generally fairly long-lived, often in use for decades, and this provides Textron with many years of recurring revenue streams, though its heavy exposure to business and private aviation makes those revenue streams quite cyclical.

We have initiated coverage of Textron with an $80 fair value estimate making the shares fully valued at recent prices. We don't believe Textron has an economic moat, but we have our eye on its military helicopter and tilt-rotor business, which could emerge in a decade or so as a pre-eminent supplier of military rotorcraft and may lift the company's returns and prospects for durable profit into moatworthy territory. But not yet.

We are dropping coverage of Textron. We provide broad coverage of more than 1,500 companies globally and periodically adjust our coverage according to investor interest and staffing.

No-moat-rated Textron posted slightly negative revenue growth due to unfavorable lumpiness in the military aftermarket at Bell offsetting solid top-line growth in aviation. Sales of $3.2 billion missed FactSet consensus by 2.1%, but earnings per share of $1.00 beat these estimates by 13.3%. We are increasing our fair value estimate for Textron to $53 per share from $51 due to the time value of money and as we slightly increase our medium-term cash flow targets.

Textron is an aerospace and defense-focused industrial conglomerate. The company produces and services private aircraft, generally light to midsize jets, as well as military and commercial aircraft. The company also has a few smaller businesses that are not focused on aerospace, including an auto supplier, a golf cart manufacturer, and a small captive finance arm.

No-moat-rated Textron posted continued growth in its private aviation segment as demand for light private jets continues to be strong into 2022. Sales of $3 billion and earnings per share of $0.88 beat FactSet consensus by 1.1% and 20.3%, respectively.

Textron is an industrial conglomerate that is focused on aerospace and defense. The company produces and services private aircraft, generally light to midsize jets, as well as military and commercial aircraft. The company also has a few smaller businesses that are not focused on aerospace, including an auto supplier, a golf cart manufacturer, and a small captive finance arm.

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.

Textron is an industrial conglomerate that is focused on aerospace and defense. The company produces and services private aircraft, generally light to midsize jets, as well as military and commercial aircraft. The company also has a few smaller businesses that are not focused on aerospace, including an auto supplier, a golf cart manufacturer, and a small captive finance arm. Overall, we see more challenges than opportunities for the company over the foreseeable future.

Textron is an industrial conglomerate that is focused on aerospace and defense. The company produces and services private aircraft, generally light to midsize jets, as well as military and commercial aircraft. The company also has a few smaller businesses that are not focused on aerospace, including an auto supplier, a golf cart manufacturer, and a small captive finance arm. Overall, we see more challenges than opportunities for the company over the foreseeable future.

Textron reported strong third-quarter earnings as the private jet market remains in the strongest cyclical upswing we’ve seen in over a decade. Revenue of $3.0 billion missed FactSet consensus by 4.7% but adjusted EPS of $0.85 beat FactSet expectations by 9.6%. After incorporating third-quarter earnings into our model, we are increasing our fair value estimate to $47 from $42 per share as we increase our medium-term revenue and margin projections to reflect the continued strong demand environment for private aviation. While the music in business aviation hasn’t stopped yet, we continue to believe that the demand surge for midsize private jets is a temporary shift rather than the start of a new norm, though if the demand environment persists well into 2022 when we expect commercial airlines will have much more supply available, we may need to re-assess our thesis.

Textron is an industrial conglomerate that is focused on aerospace and defense. The company produces and services private aircraft, generally light to midsize jets, as well as military and commercial aircraft. The company also has a few smaller businesses that are not focused on aerospace, including an auto supplier, a golf cart manufacturer, and a small captive finance arm. Overall, we see more challenges than opportunities for the company over the foreseeable future.

No-moat rated Textron reported solid second-quarter results as activity continues to rebound in its end markets. Sales for the quarter were about $3.2 billion, up 29% year over year and in line with second-quarter 2019. Textron posted earnings per share of $0.81, ahead of our expectations and FactSet Conesus. Deliveries were solid across the board as commercial demand was able to offset relatively stagnant military demand. While we are encouraged by commercial growth, we are unconvinced that this will continue in the long run. That said, we maintain our fair value estimate of $42. This would have been raised about $1 to reflect an increase in our near-term revenue and margin assumptions, but it is offset due to the impact of Morningstar's probability-adjusted U.S. corporate tax rate of 26% beginning in 2022. With shares trading around 55% above our fair value, they still look quite overvalued to us.

Textron is an industrial conglomerate that is focused on aerospace and defense. The company produces and services private aircraft, generally light to midsize jets, as well as military and commercial aircraft. The company also has a few smaller businesses that are not focused on aerospace, including an auto supplier, a golf cart manufacturer, and a small captive finance arm. Overall, we see more challenges than opportunities for the company over the foreseeable future.