Textron Inc.
Textron Inc. Fundamental Analysis
Textron Inc. (TXT) shows moderate financial fundamentals with a PE ratio of 19.33, profit margin of 6.22%, and ROE of 12.25%. The company generates $14.3B in annual revenue with moderate year-over-year growth of 6.33%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 55.2/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze TXT's fundamental strength across five key dimensions:
Efficiency Score
WeakTXT struggles to generate sufficient returns from assets.
Valuation Score
ExcellentTXT trades at attractive valuation levels.
Growth Score
ExcellentTXT delivers strong and consistent growth momentum.
Financial Health Score
ExcellentTXT maintains a strong and stable balance sheet.
Profitability Score
WeakTXT struggles to sustain strong margins.
Key Financial Metrics
Is TXT Expensive or Cheap?
P/E Ratio
TXT trades at 19.33 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, TXT's PEG of 1.61 indicates fair valuation.
Price to Book
The market values Textron Inc. at 2.26 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 9.48 times EBITDA. This is generally considered low.
How Well Does TXT Make Money?
Net Profit Margin
For every $100 in sales, Textron Inc. keeps $6.22 as profit after all expenses.
Operating Margin
Core operations generate 8.44 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $12.25 in profit for every $100 of shareholder equity.
ROA
Textron Inc. generates $5.08 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Textron Inc. generates limited operating cash flow of $1.11B, signaling weaker underlying cash strength.
Free Cash Flow
Textron Inc. produces free cash flow of $750.73M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $4.31 in free cash annually.
FCF Yield
TXT converts 4.49% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
19.33
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.61
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.26
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.16
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.45
vs 25 benchmark
Current Ratio
Current assets to current liabilities
5.94
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.12
vs 25 benchmark
ROA
Return on assets percentage
0.05
vs 25 benchmark
ROCE
Return on capital employed
0.07
vs 25 benchmark
How TXT Stacks Against Its Sector Peers
| Metric | TXT Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 19.33 | 26.49 | Better (Cheaper) |
| ROE | 12.25% | 1307.00% | Weak |
| Net Margin | 6.22% | -5131.00% (disorted) | Weak |
| Debt/Equity | 0.45 | 0.81 | Strong (Low Leverage) |
| Current Ratio | 5.94 | 10.48 | Strong Liquidity |
| ROA | 5.08% | -1549793.00% (disorted) | Weak |
TXT outperforms its industry in 3 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Textron Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
22.68%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
-5.58%
Industry Style: Cyclical, Value, Infrastructure
DecliningFCF CAGR
43.01%
Industry Style: Cyclical, Value, Infrastructure
High Growth