Ronald Epstein, an analyst from Bank of America Securities, maintained the Hold rating on Textron (TXT – Research Report). The associated price target is $85.00.
Geoff Meacham has given his Hold rating due to a combination of factors including Textron’s recent restructuring plans. The company aims to reduce operating costs by cutting 2% of its global workforce, equating to 725 employees, across its Industrial, Bell, and Textron Systems segments. Meacham acknowledges the company’s proactive measures in managing labor costs and margin pressures, yet also notes the move reflects a decreased demand within its Industrial segment, which he considers a non-essential part of Textron’s business with limited synergistic benefits.
The company’s targeted reductions in workforce are aimed at sectors like Specialized Vehicles and Kautex, which are experiencing a downward trend in demand, with expectations for this trend to persist. Despite the anticipated annual gross savings of approximately $75 million from these cutbacks, Textron is projected to incur pre-tax special charges between $115 and $135 million. Although these charges are not expected to affect Textron’s financial outlook for 2023, a cash outflow of $35 to $45 million is anticipated in 2024. Meacham’s analysis suggests that while cost-saving measures are generally positive, the anticipated charges and continued low demand in certain segments justify a cautious Hold rating on Textron’s stock.
See Insiders’ Hot Stocks on TipRanks >>
Based on the recent corporate insider activity of 25 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of TXT in relation to earlier this year.
TipRanks tracks over 100,000 company insiders, identifying the select few who excel in timing their transactions. By upgrading to TipRanks Premium, you will gain access to this exclusive data and discover crucial insights to guide your investment decisions. Begin your TipRanks Premium journey today.
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 announces 2% global workforce reduction
- Textron price target raised to $88 from $86 at TD Cowen
- 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
