Textron Stock: What’s Ahead?

Textron (NYSE: TXT) recently reported its Q4 results, with the top line missing and the bottom-line exceeding the street estimates. The company reported revenues of $3.6 billion and adjusted earnings of $1.34 per share, compared to the consensus estimates of $3.8 billion and $1.25, respectively. A strike at Textron Aviation weighed on the company’s sales in Q4. The stock declined around 6% post the results announcement, but it has somewhat recovered.

TXT stock is down 3% since the beginning of 2024, underperforming the broader S&P500 index, up 28%. The stock price was weighed down last year amid fewer than expected commercial jets and turboprops deliveries. If you want upside with a smoother ride than an individual stock, consider the High-Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.

Textron’s revenue of $3.6 billion in Q4, reflected a 7% y-o-y decline. This can primarily be attributed to a 16% fall in Textron Aviation segment. The strike last year weighed on the segment’s performance. The company delivered only 32 jets and 38 turboprops in Q4, versus 50 and 40 in the prior year quarter, respectively. Textron Systems and Industrials segments also saw a slight decline in sales, while Bell segment revenue was up 5%, amid higher volume on the FLRAA program.

Textron’s segment profit margin contracted by 210 bps y-o-y to 7.7% in Q4. Its bottom line stood at $1.34 on an adjusted basis in Q4, reflecting a 16% y-o-y decline. Looking forward, the company’s outlook for 2025 was lower than anticipated. It expects sales to rise around 7% to $14.7 billion and adjusted earnings to be in the range of $6.00 and $6.20 per share. This compares with the street expectation of $6.39 per share.

What does this mean for TXT stock?

Textron posted a downbeat quarter as well as outlook. Still, the stock hasn’t seen any meaningful decline as investors remain optimistic about the company’s backlog of $7.8 billion, up in the low single-digits versus the prior-year quarter. Even if we look at a slightly longer period, the increase in TXT stock over the last four-year period has been far from consistent, with annual returns being more volatile than the S&P 500. Returns for the stock were 60% in 2021, -8% in 2022, 14% in 2023, and -5% in 2024.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, is much less volatile. And it has comfortably outperformed the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

Given the current uncertain macroeconomic environment around rate cuts and changes in the White House, could TXT face a similar situation as it did in 2023 and 2024 and underperform the S&P over the next 12 months — or will it see a strong jump? While we will soon update our model for TXT to reflect the latest results, its stock seems to have some room for growth. At its current levels of $78, TXT stock trades at under 13x forward expected earnings of $6.10 per share at the mid-point of the guided range. This is lower than the stock’s average P/E ratio of over 16x for the last three years.

While TXT stock looks like it has ample room for growth, it is helpful to see how Textron’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.

[1] Returns as of 1/24/2025
[2] Cumulative total returns since the end of 2016

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