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Providence, Rhode Island-based Textron Inc. (TXT) is a global multi-industry company that manufactures aircraft, automotive engine components and industrial tools. Valued at a market cap of $13.6 billion, the company’s products include commercial and military helicopters, light- and mid-size business jets, plastic fuel tanks, automotive trim products, utility vehicles, turf-car equipment, industrial pumps and gears, and other industrial products.
Companies worth $10 billion or more are typically classified as “large-cap stocks,” and Textron fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the aerospace & defense industry. The company benefits from long-term U.S. defense contracts, particularly in military rotorcraft and unmanned systems, ensuring steady revenue. With operations in over 25 countries, Textron maintains a strong global presence, leveraging its vertically integrated supply chain and innovative manufacturing capabilities to remain competitive in both commercial and defense markets.
This aircraft company has slipped 22.8% from its 52-week high of $97.34, reached on Apr. 8, 2024. It has declined 2.9% over the past three months, outpacing the broader S&P 500 Index’s ($SPX) 5.4% loss over the same time frame.
Moreover, on a YTD basis, shares of TXT are down 1.7%, outperforming SPX’s 2.9% downtick. However, in the longer term, TXT has dipped 21.7% over the past 52 weeks, considerably lagging behind SPX’s 9.8% rise over the same time frame.
To confirm its bearish trend, TXT has been trading below its 200-day moving average since late September, 2024, and has remained below its 50-day moving average since early August, 2024, with some fluctuations.
TXT released its Q4 earnings results on Jan. 22, and shares of the company closed down marginally as it presented a mixed performance. On the brighter side, its adjusted earnings of $1.34 per share exceeded the forecasted figure by 7.2%. However, on the downside, the bottom-line figure declined 16.3% from the year-ago quarter. Additionally, its revenue fell 7.2% year-over-year to $3.6 billion, missing Wall Street expectations by 3.5%. The decline was largely driven by a 15.9% drop in Textron aviation’s revenue, impacted by lower production volumes due to labor strike-related disruptions. Moreover, its industrial segment’s revenue plunged 9.6% annually due to lower volumes and mix, notably in the specialized vehicles product line, further impacting the results.
TXT has lagged behind its rival, Lockheed Martin Corporation’s (LMT) slight decline over the past 52 weeks but has outpaced LMT’s 8.4% fall on a YTD basis.
Given Textron’s recent outperformance relative to the S&P 500, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 14 analysts covering it, and the mean price target of $90.36 suggests a 20.2% premium to its current levels.
