Textron (TXT) Is Gaining, But the Market Is Lagging: What You Need to Know

Textron (TXT) ended the most recent trading day at $65.72, up 0.66% from the previous trading session. The move lagged the S&P 500’s daily gain of 0.93%. At the same time, the Dow rose 0.56% and the tech-heavy Nasdaq gained 1.71%.

Heading into today, shares of the maker of Cessna small planes and Bell helicopters were up 3.16% over the past month. At the same time, the aviation sector gained 3.21%, and the S&P 500 gained 4.61%.

Investors will be hoping for strength from Textron as it nears its next earnings release. The company is expected to report EPS of $1.20, up 20% from the prior-year quarter. Our latest consensus estimate is calling for quarterly revenue of $3.4 billion, up 7.76% from the year-ago period.

TXT’s full-year Zacks Consensus Estimates are projecting earnings of $5.09 per share and revenue of $13.8 billion. These results would represent year-over-year changes of +26.93% and +7.24%, respectively.

Also note the recent changes to analyst estimates for Textron. Recent changes usually reflect the latest short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business prospects.

Based on our research, we believe these estimate revisions are directly related to stock movements across the board. Investors can take advantage of this by using the Zacks Rank. This model takes these estimate changes into account and provides a simple, practical rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Our consensus EPS projection has moved 0.43% within the past 30 days. Textron is currently sporting a Zacks Rank #3 (Hold).

Investors should also note Textron’s current valuation metrics, including its Forward P/E ratio of 12.83. This represents a discount compared to its industry’s average Forward P/E of 16.13.

We can also see that TXT currently has a PEG ratio of 1.15. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account a stock’s expected earnings growth rate. As of yesterday’s close, the average PEG ratio for the Aerospace – Defense sector was 1.79.

The aerospace and defense industry is part of the aviation sector. This group has a Zacks Industry Rank of 157, which puts it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank ranks from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that industries that receive a top 50% rating outperform the bottom half by a factor of 2 to 1.

Find more information on all of these metrics and more on Zacks.com.

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