In a report released today, Cai von Rumohr from TD Cowen maintained a Buy rating on Textron (TXT – Research Report), with a price target of $88.00.
Cai von Rumohr has given Textron a Buy rating due to a combination of factors that project a positive outlook for the company’s financial performance. The anticipated mid-teens growth in Aviation EBIT and a consistent share repurchase program suggest that Textron can achieve approximately a 10% adjusted EPS compound growth rate in the years 2024-25. Furthermore, the firm identifies potential for additional growth through new programs and the possibility of mergers and acquisitions, which remains an unpredictable yet potentially beneficial aspect for the company’s future. Von Rumohr’s confidence is also reflected in the increased price target to $88, applying a multiple of 12.5x to the 2024 TEV/EBITDA estimates, indicating an optimistic view of the company’s valuation.
Textron’s Aviation sector is showing robust backlog growth, indicating sustained demand extending into the mid-2020s, which gives the company a solid foundation for future revenue. The report also notes that Bell and Systems segments are expected to have flat to upward trends in the coming years, with particular growth drivers being FLRAA development and a recovery in commercial volume. Bell’s new program competitions and Systems’ portfolio diversity also present potential for increased longer-term growth. Despite facing potential cyclical downturns and supply chain challenges, the report underscores Textron’s strong positioning and prospects for revenue expansion, supporting the Buy recommendation.
According to TipRanks, von Rumohr is a 5-star analyst with an average return of 6.0% and a 62.78% success rate. von Rumohr covers the Industrials sector, focusing on stocks such as Spirit AeroSystems, Boeing, and Moog.
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Textron (TXT) Company Description:
Textron, Inc. is a multi-industry company, which leverages global network of aircraft, defense, industrial, and finance businesses to provide customers innovative solutions and services. The company operates its business through the following segments: Textron Aviation, Bell, Textron Systems, Industrial, and Finance. The Textron Aviation segment manufactures sells, and services Beechcraft and Cessna aircraft. The Bell segment supplies military and commercial helicopters, tiltrotor aircraft, and related spare parts. The Textron Systems segment product lines consist of unmanned aircraft systems; land and marine systems; weapons and sensors; and a variety of defense and aviation mission support products and services. The Industrial segment designs and manufactures a variety of products under the Golf; Turf Care and Light Transportation Vehicles; Fuel Systems and Functional Components and Powered Tools; and Testing and Measurement Equipment product lines. The Finance segment consists of Textron Financial Corp. and its consolidated subsidiaries, which provides finances primarily to purchasers of new Cessna aircraft and Bell helicopters. The company founded by Royal Little in 1923 and is headquartered in Providence, RI.
Read More on TXT:
- Textron enters pact with BAA Training for purchase of 48 Cessna Skyhawk aircraft
- Textron reports agreement to purchase 48 Cessna Skyhawks to support BAA Training
- Textron annouces up to $100M U.S. Army contract over five years
- Textron price target raised to $90 from $85 at Barclays
- Textron raises 2023 adjusted EPS view to $5.45-$5.55 from $5.20-$5.30
