Reasons to Add Textron (TXT) to Your Portfolio Right Now
Textron Inc. TXT is an aerospace defense company that manufactures aircraft, automotive engine components and industrial tools. The company’s stable financial position and well-diversified product portfolio make it a strong candidate for investment in the defense space.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projections & Surprise History
Textron’s long-term (three-to-five-year) earnings growth expectation is 11.7%.
The Zacks Consensus Estimate for TXT’s 2023 earnings per share (EPS) is pegged at $5.48. The bottom-line estimates have moved up 3.4% in the past 90 days.
The Zacks Consensus Estimate for 2023 sales is pegged at $13.7 billion, indicating growth of 6.4% from the 2022 reported figure.
TXT delivered a trailing four-quarter average earnings surprise of 14.13%.
Debt Position
The total debt-to-capital of TXT is 33.32%, better than 46.78% registered by the industry. This indicates that the company has less debt than its peers, which is a positive sign.
TXT has a current ratio of 1.88, better than the industry’s average of 1.12. This implies that the company has sufficient financial capability to pay its short-term debt obligations.
Strong Backlog and Innovations
The solid demand for Textron’s products resulted in a total backlog of $14.53 billion at the end of third-quarter 2023.
Textron has been continuously innovating products to expand its footprint in the aerospace market. During third-quarter 2023, Textron Aviation launched the newest Cessna Citation business jet, the Cessna Citation CJ3 Gen2. Bell is also developing a new rotorcraft, the Bell 360 Invictus, for the U.S. Army's Future Attack Reconnaissance Aircraft Competitive Prototype Program.
Return on Equity (ROE)
ROE is a measure of a company’s financial performance and shows how it is utilizing its funds. TXT’s current ROE is 14.7%, better than the industry’s average of 10.55%, 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 14.5% against the industry’s average decline of 7.1%.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks in the same sector are Virgin Galactic Holdings Inc. SPCE, Leidos Holdings Inc. LDOS and TransDigm Group Inc. TDG. Each stock carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
SPCE boasts a long-term earnings growth rate of 40.3%. The Zacks Consensus Estimate for 2023 sales is pegged at $6.75 million, implying an improvement of 192.1% from the 2022 reported figure.
LDOS boasts a long-term earnings growth rate of 8.1%. The Zacks Consensus Estimate for 2023 sales is pegged at $15.25 billion, implying a year-over-year improvement of 5.9%.
TDG boasts a long-term earnings growth rate of 16.3%. The Zacks Consensus Estimate for fiscal 2024 sales is pegged at $7.59 billion, implying a year-over-year improvement of 15.2% from the fiscal 2023 reported figure.
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Textron Inc. (TXT) : Free Stock Analysis Report
Transdigm Group Incorporated (TDG) : Free Stock Analysis Report
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