Last Update 21 Feb 26

Fair value Increased 0.61%

TXT: Fair Outlook Will Balance Mixed EPS Execution And Sector Momentum Tailwinds

The analyst price target for Textron edges up slightly as analysts factor in a series of recent target lifts toward the $100 plus range and incorporate updated views on margins, revenue growth and valuation multiples.

Analyst Commentary

Recent research on Textron clusters around a higher target range above $100, with analysts weighing solid reported revenue against mixed earnings and sector level views. Here is how the Street is framing the risk reward right now.

Bullish Takeaways

Bullish analysts lifting targets into the $107 to $115 range see room for upside as they refresh models after the latest 10 K filing and sector wide reviews.
Industrial margins are cited as a support for valuation, with commentary pointing to 20 basis points of expansion in 2025 tied to cost actions, even with volume headwinds.
Some research highlights that the sharp share price reaction to Q4 diluted EPS of $1.33 versus consensus of $1.49 looked excessive, especially as revenue of $4.18b came in above the $4.08b consensus.
Updates across the aerospace and defense group, including the move from $91 to $107 on one target, reflect a view that sector momentum could continue through at least the first half of 2026. This feeds into Textron’s growth narrative and supports higher multiples.

Bearish Takeaways

Bearish analysts who cut targets or keep only neutral or market perform ratings point to the Q4 EPS shortfall versus expectations as a sign that execution on profitability may lag revenue performance.
Several firms that raised targets still stopped short of an outright bullish rating, which signals caution around how much of the sector strength is already reflected in Textron’s current valuation.
The mix of target increases and reductions in a short time window suggests ongoing debate about the sustainability of recent margin trends and whether cost actions can consistently offset volume and other pressures.
Comments that sector demand may outstrip supply beyond 2030 are helpful for long term growth, but some analysts appear reluctant to extrapolate that too aggressively into near term earnings. This tempers how far they are willing to push targets today.

What's in the News

Textron announced a new share repurchase program authorizing the company to buy back up to 25,000,000 shares with no expiration date, aimed at offsetting dilution from stock based compensation and for opportunistic capital management (Key Developments).
The Board of Directors authorized a buyback plan on February 11, 2026, reinforcing the company’s focus on returning capital alongside other uses of cash (Key Developments).
Textron provided 2026 guidance, calling for approximately US$15.5b in revenue compared with US$14.8b in 2025 and GAAP EPS from continuing operations in a range of US$5.39 to US$5.59 for the year (Key Developments).
Between September 28, 2025 and January 3, 2026, Textron repurchased 2,229,148 shares for US$187m, bringing total repurchases under the July 27, 2023 authorization to 29,998,148 shares, or 16% of the company, for US$2,444.15m (Key Developments).

Valuation Changes

Fair Value: $98.41 to $99.01, a small upward adjustment of around 0.6%.
Discount Rate: 8.02% to 7.97%, a modest reduction that slightly lowers the required return in the model.
Revenue Growth: 4.30% to 3.95%, a small reduction in the projected top line growth rate.
Net Profit Margin: 7.04% to 6.92%, a slight trim to expected profitability.
Future P/E: 17.23x to 16.90x, a mild compression in the assumed forward earnings multiple.

FAA certification of the Catalyst engine will boost revenue for Textron with strong market demand for the Beechcraft Denali program.
Strategic restructuring and industrial segment optimization, including power sports divestiture, will enhance net margins by lowering exposure to low-margin products.
Challenges in cost management, product mix, and external vulnerabilities may hinder Textron's profitability and future revenue growth in key segments.

Catalysts

About Textron

Operates in the aircraft, defense, industrial, and finance businesses worldwide.What are the underlying business or industry changes driving this perspective?

The FAA certification of the GE Aerospace Catalyst turboprop engine for the Beechcraft Denali program is set to significantly boost revenue as the program progresses toward completion, offering a new product line with expected strong market demand.
Bell's military and commercial segments are experiencing strong growth, driven by FLRAA program execution and recent new contracts for aircraft, which will positively impact revenue and potentially increase net margins through scale and efficiency improvements.
The strategic shift and restructuring in Textron's Industrial segment, including the sale of the powersports business, is expected to optimize operations and cost structure, potentially enhancing net margins by reducing exposure to lower-margin product lines.
Aviation's ongoing recovery from post-strike disruptions, with improving factory operations and productivity metrics, positions the company for increased production efficiency, which is anticipated to improve earnings as the ramp-up progresses.
Continued strength in Textron's Aviation aftermarket business, driven by robust fleet utilization and flying hours, is likely to contribute to increased revenue and improved net margins, given the typically higher profitability of aftermarket services compared to new product sales.

Textron Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Textron's revenue will grow by 4.8% annually over the next 3 years.
Analysts assume that profit margins will increase from 5.8% today to 7.0% in 3 years time.
Analysts expect earnings to reach $1.1 billion (and earnings per share of $7.02) by about September 2028, up from $816.0 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 16.2x on those 2028 earnings, down from 17.6x today. This future PE is lower than the current PE for the US Aerospace & Defense industry at 34.4x.
Analysts expect the number of shares outstanding to decline by 3.94% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.26%, as per the Simply Wall St company report.

Textron Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Textron's overall segment profit declined even with revenue growth, indicating potential issues with cost management or pricing strategies that could impact future net margins.
Textron Aviation experienced a decrease in segment profit due to a less favorable mix of aircraft sold, which may continue to impact earnings if product mix doesn't improve.
The Industrial segment reported lower revenues due to reduced volume and mix, which reflects potential weaknesses in the demand for its products, potentially affecting revenue growth.
Textron's exposure to the automotive market through its Kautex business makes it vulnerable to declines in global automotive production, which could reduce revenues.
Even though supply chain disruptions seem under control for now, future tariff impacts and geopolitical uncertainties could increase costs or disrupt production, negatively affecting net margins and earnings.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $92.571 for Textron based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $107.0, and the most bearish reporting a price target of just $82.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $16.2 billion, earnings will come to $1.1 billion, and it would be trading on a PE ratio of 16.2x, assuming you use a discount rate of 8.3%.
Given the current share price of $80.53, the analyst price target of $92.57 is 13.0% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

FAA Certification And FLRAA Program Will Strengthen Air Systems