TXT changes
Pick any two versions below to diff them.
- Price
- $75.93 → $77.28(+1.8%)
- Discount
- 16% → 14%(−2.0 pts)
- Thesis
- The market prices Textron for slow profit growth and for the risk on its large new military program. Segment profit at Textron Aviation and Bell fell in Q2 2026 because of manufacturing inefficiencies, lower jet deliveries and program mix. The MV-75 Cheyenne is Bell's most important future program, and its funding depends on US budget decisions: Textron's 2026 outlook assumes extra 2026 funding through an Above Threshold Reprogramming request, and without it adjusted EPS could be $0.20 to $0.30 lower and cash flow $150 million to $250 million lower. Aviation Week reported that a Pentagon notice of September 28, 2026, moved about $200 million more to the program before the fiscal year ended. Textron has not yet said whether this money meets the assumption in its outlook. Investors also value Textron as a conglomerate with a low-margin Industrial segment. Results are on plan: in Q2 2026, revenues rose to $3.83 billion and adjusted EPS rose to $1.62 from $1.55, and Textron kept its 2026 guidance of adjusted EPS of $6.40 to $6.60. For the gap to close, three things must be true. The MV-75 must get its funding and move through development on schedule. Textron Aviation must turn its $8.0 billion backlog into more deliveries with better margins. Textron must complete the separation of the Industrial segment, by a sale or a spin-off, within 12 to 18 months of April 2026, as planned. The Q3 2026 report on October 29, 2026, is the next test. The 2027 guidance in January 2027 is the main test. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is a delay or a cut in MV-75 funding.
- Recent events
- 2026-09-29: Textron said that it will report Q3 2026 results on October 29, 2026. 2026-09-28: Aviation Week reported that a Pentagon reprogramming notice of September 28, 2026, moved $200.2 million to the Army's MV-75 development account. This brought the program's fiscal 2026 funding to $1.422 billion. The notice said that the $230 million approved in July was not enough. Textron had used its own money to keep the program on schedule. 2026-07-28: Textron reported Q2 2026 results. Revenues rose 3% to $3.83 billion. GAAP EPS was $1.42 and adjusted EPS was $1.62, up from $1.55. Textron Aviation delivered 40 jets and 44 turboprops and had a backlog of $8.0 billion. Bell revenues rose 6% to $1.1 billion with higher H-1 and MV-75 volume, and Bell's backlog was $7.5 billion. Textron kept its 2026 guidance and bought back $209 million of shares. 2026-04-30: Textron said that it intends to separate its Industrial segment, Kautex and Textron Specialized Vehicles, from its aerospace and defense businesses. It will look at a sale or a tax-free spin-off and targets completion within 12 to 18 months. 2026-04-30: Textron reported Q1 2026 results. GAAP EPS was $1.25 and adjusted EPS was $1.45, up from $1.28. Textron bought back $168 million of shares.