TXT) was upgraded from Neutral to Outperform following a solid earnings report and positive earnings surprise. The beat was due to strong performance by the Bell division of the company and other operational improvements. The company is also
lowering its risk profile through liquidation
of non-captive finance receivables to focus more on
its core manufacturing business.
Textron Inc. is a global multi-industry company that manufactures aircraft, automotive engine
components, and industrial tools. It is also a provider of solutions and services for aircraft, fastening
systems, and industrial products and components.
Textron reported strong second quarter 2012 earnings of $0.58 per share versus $0.29 per share
in the year ago quarter. The quarterly result also comfortably surpassed the Zacks Consensus Estimate
of $0.44. Higher numbers for the company were due to strong performance at Bell, continued
improvement at Cessna, complemented by good performance in the Industrial business.
We believe TXT can expand its multiple from here and thus
upgraded our recommendation from Neutral to Outperform, indicating that the stock will perform better
than the market. Our target price is $33.00 or 15.7x 2012 EPS, reflects this view.
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