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Are Investors Undervaluing Textron (TXT) Right Now?
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Textron (TXT - Free Report) . TXT is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 13.82. This compares to its industry's average Forward P/E of 21.11. Over the last 12 months, TXT's Forward P/E has been as high as 17.68 and as low as 11.81, with a median of 14.33.
Investors will also notice that TXT has a PEG ratio of 1.24. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TXT's industry currently sports an average PEG of 1.55. TXT's PEG has been as high as 1.40 and as low as 0.98, with a median of 1.15, all within the past year.
Investors should also recognize that TXT has a P/B ratio of 2.14. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.76. TXT's P/B has been as high as 2.27 and as low as 1.78, with a median of 2, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. TXT has a P/S ratio of 1.14. This compares to its industry's average P/S of 1.17.
Finally, we should also recognize that TXT has a P/CF ratio of 11.81. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 19.17. Over the past year, TXT's P/CF has been as high as 12.70 and as low as 10.05, with a median of 11.50.
These are only a few of the key metrics included in Textron's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, TXT looks like an impressive value stock at the moment.
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Are Investors Undervaluing Textron (TXT) Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Textron (TXT - Free Report) . TXT is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 13.82. This compares to its industry's average Forward P/E of 21.11. Over the last 12 months, TXT's Forward P/E has been as high as 17.68 and as low as 11.81, with a median of 14.33.
Investors will also notice that TXT has a PEG ratio of 1.24. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TXT's industry currently sports an average PEG of 1.55. TXT's PEG has been as high as 1.40 and as low as 0.98, with a median of 1.15, all within the past year.
Investors should also recognize that TXT has a P/B ratio of 2.14. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.76. TXT's P/B has been as high as 2.27 and as low as 1.78, with a median of 2, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. TXT has a P/S ratio of 1.14. This compares to its industry's average P/S of 1.17.
Finally, we should also recognize that TXT has a P/CF ratio of 11.81. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 19.17. Over the past year, TXT's P/CF has been as high as 12.70 and as low as 10.05, with a median of 11.50.
These are only a few of the key metrics included in Textron's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, TXT looks like an impressive value stock at the moment.