TXT Textron
Solid franchise, stubborn margins; at ~77 the market still prices in more than the story delivers.
The story
Textron is a diversified aerospace and defense conglomerate: Cessna/Beechcraft business jets and turboprops, Bell helicopters (with the long-dated FLRAA/MV-75 program), Textron Systems, and a lower-margin Industrial segment. Its moat is a strong brand and installed base in light business aviation plus sticky defense franchises, but it is a mature, cyclical business where mix and Industrial drag keep margins stuck in the high single digits. Bell's FLRAA ramp gives it a long runway, but early development margins are thin, and autonomy concepts like the pilotless cargo plane are optionality, not a source of value today.
No material facts changed since the 2026-09-07 take: TTM revenue of 15.3B confirms mid-single-digit growth in line with the ~4.8% five-year CAGR, and the 8.5% margin sits within its multi-year band, so I keep the drivers. A 9% target margin allows modest improvement from Aviation pricing and Bell scale without assuming peak economics. Sales-to-capital of 1.3 matches history, and beta stays at the industry anchor.
Value drivers
| Revenue growth (Y1) | 4.5% |
| Terminal growth | 2.5% |
| Forecast horizon | 8y |
| Target operating margin | 9.0% |
| Years to target margin | 7 |
| Sales-to-capital | 1.30 |
| Beta | 1.20 |
| Failure probability | 1.0% |
| Cost of capital (WACC) | 9.4% |
| Terminal WACC | 8.7% |
Valuation bridge
| PV of explicit FCFF | 4.38B |
| PV of terminal value | 8.64B |
| Equity value | 11.05B |
| ÷ shares → per share | $64.24 |
News
neutral -0.10 · 8 articles
- Is Textron Underperforming the Nasdaq?
- Howmet vs. Textron: Which Aerospace & Defense Stock Should You Bet On?
- ACHR vs. TXT: Which Future Aviation Stock Is the Better Buy?
- Textron (TXT) Unveils a Cargo Plane Concept That Needs No Pilot
- Joby Is Still Early. That’s Exactly Why the Stock Is So Interesting
- Can GE Aerospace Continue Its Strong Capital Returns to Shareholders?
- GE Trades Below 50-Day and 200-Day SMA: How to Play the Stock?
- Solid Demand in Commercial Aerospace Drives Howmet: Can It Sustain?
Projected free cash flow to the firm
| Yr | Revenue | Growth | Margin | NOPAT | Reinvest | FCFF | PV |
|---|---|---|---|---|---|---|---|
| 1 | 15.99B | 4.5% | 8.6% | 1.11B | 529.58M | 581.82M | 532.04M |
| 2 | 16.66B | 4.2% | 8.6% | 1.17B | 518.27M | 649.81M | 543.37M |
| 3 | 17.32B | 3.9% | 8.7% | 1.22B | 503.50M | 720.70M | 551.09M |
| 4 | 17.95B | 3.6% | 8.8% | 1.28B | 485.22M | 794.17M | 555.31M |
| 5 | 18.55B | 3.4% | 8.9% | 1.33B | 463.45M | 869.84M | 556.19M |
| 6 | 19.12B | 3.1% | 8.9% | 1.39B | 438.25M | 947.29M | 553.89M |
| 7 | 19.65B | 2.8% | 9.0% | 1.44B | 409.69M | 1.03B | 548.61M |
| 8 | 20.14B | 2.5% | 9.0% | 1.47B | 377.91M | 1.09B | 534.76M |
Key risks
- Business jet demand cycle turns down, hitting high-margin Cessna/Beechcraft deliveries
- FLRAA/MV-75 development cost overruns or fixed-price exposure compress Bell margins
- Industrial segment (Kautex, Specialized Vehicles) keeps diluting consolidated margins and returns
Catalysts
- FLRAA milestone progress and faster-than-planned production funding
- Portfolio simplification (Industrial divestiture) lifting consolidated margin and multiple