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Reasons to Add Textron (TXT) to Your Portfolio Right Now
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Textron Inc. (TXT - Free Report) is a global multi-industry manufacturer of aircraft, automotive engine components and industrial tools. With its solid product pipeline, strong order flows and huge global footprint, it boasts a strong performance.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for TXT’s 2023 earnings per share is pegged at $5.30. The bottom-line estimates have moved up 4.1% in the past 60 days.
The Zacks Consensus Estimate for current year sales stands at $13.86 billion, indicating year-over-year growth of 7.7%.
Surprise History and Earnings Growth
Textron’s trailing four-quarter earnings surprise is 12.99%, on average.
The company’s long-term (three- to five-year) earnings growth is projected at 11.7%.
Debt and Liquidity
As of Jul 1, 2023, Textron’s cash equivalents were $1.70 billion and its current debt was $360 million. Therefore, it can be safely concluded that the company holds a strong solvency position, at least in the near term.
Textron’s current ratio of 1.87 is better than industry’s average of 1.16. This implies that the company has sufficient financial capability to pay its short-term debt obligations.
Strong Backlog and Innovation
Textron’s total backlog was a solid $14.29 billion as of Jul 01, 2023, up from $13.27 as of Dec 31, 2022. Of this backlog, the company expects to recognize revenues of approximately 80% through 2024, an additional 17% through 2026 and the balance thereafter.
Textron has been working on new product launches. In July 2023, the company unveiled the Beechcraft Denali aircraft, a new single-engine turboprop. During second-quarter 2023, it launched its Cessna Citation Ascend aircraft and its new Liberty LSV, a street legal vehicle.
The company’s unit Bell is also developing the V-280 Valor, a next-generation vertical lift aircraft; a new rotorcraft, the Bell 360 Invictus and the first super medium commercial helicopter, the 525 Relentless, currently awaiting certification. Such solid backlog count and innovations boost TXT’s future revenue generation prospects.
Return on Equity (ROE)
ROE is a measure of a company’s financial performance and shows how it is utilizing its funds. Textron’s ROE is currently pegged at 13.83%, better than the industry’s average of 9.57%, which indicates that the company is utilizing its funds more efficiently than its peers.
Price Performance
In the past year, TXT’s shares have rallied 24.4% against the industry’s decline of 3.2%.
The Zacks Consensus Estimate for SIDU’s 2023 sales indicates year-over-year growth of 3.3%. In the past 60 days, the Zacks Consensus Estimate for earnings has moved up 18.5%.
SPCE boasts a long-term earnings growth rate of 40.9%. The Zacks Consensus Estimate for 2023 sales indicates year-over-year growth of 118.6%.
The Zacks Consensus Estimate for CW’s 2023 sales indicates year-over-year growth of 8.1%. It delivered an average earnings surprise of 4.08% in the past four quarters.
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Reasons to Add Textron (TXT) to Your Portfolio Right Now
Textron Inc. (TXT - Free Report) is a global multi-industry manufacturer of aircraft, automotive engine components and industrial tools. With its solid product pipeline, strong order flows and huge global footprint, it boasts a strong performance.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for TXT’s 2023 earnings per share is pegged at $5.30. The bottom-line estimates have moved up 4.1% in the past 60 days.
The Zacks Consensus Estimate for current year sales stands at $13.86 billion, indicating year-over-year growth of 7.7%.
Surprise History and Earnings Growth
Textron’s trailing four-quarter earnings surprise is 12.99%, on average.
The company’s long-term (three- to five-year) earnings growth is projected at 11.7%.
Debt and Liquidity
As of Jul 1, 2023, Textron’s cash equivalents were $1.70 billion and its current debt was $360 million. Therefore, it can be safely concluded that the company holds a strong solvency position, at least in the near term.
Textron’s current ratio of 1.87 is better than industry’s average of 1.16. This implies that the company has sufficient financial capability to pay its short-term debt obligations.
Strong Backlog and Innovation
Textron’s total backlog was a solid $14.29 billion as of Jul 01, 2023, up from $13.27 as of Dec 31, 2022. Of this backlog, the company expects to recognize revenues of approximately 80% through 2024, an additional 17% through 2026 and the balance thereafter.
Textron has been working on new product launches. In July 2023, the company unveiled the Beechcraft Denali aircraft, a new single-engine turboprop. During second-quarter 2023, it launched its Cessna Citation Ascend aircraft and its new Liberty LSV, a street legal vehicle.
The company’s unit Bell is also developing the V-280 Valor, a next-generation vertical lift aircraft; a new rotorcraft, the Bell 360 Invictus and the first super medium commercial helicopter, the 525 Relentless, currently awaiting certification. Such solid backlog count and innovations boost TXT’s future revenue generation prospects.
Return on Equity (ROE)
ROE is a measure of a company’s financial performance and shows how it is utilizing its funds. Textron’s ROE is currently pegged at 13.83%, better than the industry’s average of 9.57%, which indicates that the company is utilizing its funds more efficiently than its peers.
Price Performance
In the past year, TXT’s shares have rallied 24.4% against the industry’s decline of 3.2%.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks in the same sector are Sidus Space Inc. (SIDU - Free Report) , Virgin Galactic Holdings Inc. (SPCE - Free Report) and CurtissWright Corp. (CW - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for SIDU’s 2023 sales indicates year-over-year growth of 3.3%. In the past 60 days, the Zacks Consensus Estimate for earnings has moved up 18.5%.
SPCE boasts a long-term earnings growth rate of 40.9%. The Zacks Consensus Estimate for 2023 sales indicates year-over-year growth of 118.6%.
The Zacks Consensus Estimate for CW’s 2023 sales indicates year-over-year growth of 8.1%. It delivered an average earnings surprise of 4.08% in the past four quarters.