TXT
Textron Inc.$99.42
Hold
Target $111.60
Report: Mar 08, 2026Industrials • Aerospace & Defense • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$99.42+12.3%
Rec: HoldConviction: Medium
Entry Target
$85.85
(14% below current)
Fair Value
$111.60
(12% above current)
Stop Loss
$79.82
(20% below current)
Position Size
Starter
Time Horizon
Long-Term
Key Metrics
Live Snapshot
Market Data
52 Week High$101.57
52 Week Low$57.70
Avg. 3 Month Volume1.81M
Efficiency
LTM Gross Margin18.2%
LTM EBITDA Margin11.2%
LTM EBIT Margin8.5%
LTM Operating Margin8.5%
LTM ROA5.3%
LTM ROE12.2%
LTM ROIC9.8%
LTM ROCE9.8%
Capital Structure
Market Cap (MM)$15.2B
Enterprise Value (MM)$17.1B
Shares Outstanding174.16M
Total Debt (MM)$3.88B
Cash & Equivalents (MM)$2.02B
LTM Net Debt (MM)$1.85B
LTM Net Debt/EBITDA1.1x
Growth
TTM Rev. Growth8.0%
Last 3-Yr Rev. CAGR4.8%
Last 3-Yr EBITDA CAGR3.0%
Last 3-Yr EPS CAGR8.4%
Valuation
Street Target Price$103.80
LTM EV/Revenue1.2x
LTM EV/Gross Profit6.3x
LTM EV/EBIT13.6x
LTM EV/EBITDA10.3x
LTM P/E16.6x
LTM EV/FCF18.2x
LTM P/FCF16.3x
LTM P/TB1.0x
LTM P/B1.9x
Dividend Yield0.1%
Payout Ratio1.6%
Executive SummarySituation: Current price is $99.42 versus fair value $111.6 (12.3% expected return), and valuation confidence is stable. Debate: Bull case depends on Award of the MV-75 Low-Rate Initial Production (LRIP) contract. Bear case centers on Moat erosion and competitive pressure from larger peers like RTX and General Dynamics. Conclusion: Recommendation is Hold with Starter sizing and Long-Term horizon.
Bull Case
The MV-75 program transitions to high-margin production post-2026, potentially adding $70B in lifecycle value. Aviation incremental margins of 15-20% drive significant earnings growth as the $7.8B segment backlog is converted. Continued aggressive buybacks at 11.4x EV/EBITDA remain highly accretive to EPS.
Bear Case
Organic revenue growth remains tepid at a 4.9% 5-year CAGR, suggesting EPS growth is overly reliant on financial engineering. Rising labor costs and supply chain constraints, particularly in engines, could further compress gross margins below the current 18.2%. Significant insider selling ($32.2M in 12 months) signals a lack of management conviction at current price levels.
Key Catalysts
Mid-Term (6-18 months)Impact: Critical
Award of the MV-75 Low-Rate Initial Production (LRIP) contract. This award will validate the transition from low-margin development to high-...
Near-Term (0-6 months)Impact: High
Service entry and certification of the Beechcraft Denali. Successful certification will drive Aviation segment revenue and demonstrate the c...
Long-Term (18+ months)Impact: Moderate
Textron is at a critical juncture following its January 2026 leadership transition and the recent 7.9% price decline after its Q4 2025 earni...
Primary Risks
Concern: Medium
Moat erosion and competitive pressure from larger peers like RTX and General Dynamics. Larger rivals could use their scale to underbid Textr...
Concern: High
Execution risk and cost overruns during the MV-75 production ramp. Concurrency risk in the transition from development to production could l...
Concern: Medium
Stewardship is strong regarding capital allocation but mixed regarding alignment. The Governance Outcome Tree suggests: 1. Status Quo: Ather...
Recent Activity
2026-01-28SEC Filing (8-K)
-7.90%Textron reported Q4 2025 results with $1.33 EPS, 16% revenue growth to $4.2B, and announced 2026 financial outlook.
2025-07-24SEC Filing (8-K)
-7.20%Textron reported Q2 2025 results with $1.35 EPS, 5.4% revenue growth to $3.7B, and raised 2025 cash outlook to $900M-$1.0B.
2025-03-04SEC Filing (DEFA14A)
-5.17%Textron 2025 Annual Meeting proxy materials filed with director elections and shareholder proposals
2024-10-24SEC Filing (8-K)
-6.19%Textron reported Q3 2024 results with $1.18 EPS, $215M share repurchases, and lowered full-year outlook due to IAM strike resolution.
2024-04-25SEC Filing (8-K)
-9.69%Textron reports Q1 2024 results with EPS of $1.03, adjusted EPS of $1.20
Valuation Table
9.8/10Decision Grade
Scenario Range
$80
Bear
$140
Bull
$99