What's Next For Textron Stock After A 5% Fall In A Week?

Core Viewpoint - Textron reported Q2 results with revenues of $3.5 billion and adjusted earnings of $1.54 per share, exceeding estimates, driven by growth in the Textron Aviation and Bell segments [1][5]. Financial Performance - Textron's Q2 revenue of $3.5 billion reflects a 3% year-over-year increase, with the Bell segment up 13% due to higher military revenues, while the Aviation segment rose 8% from increased deliveries of commercial turboprops [5]. - The adjusted earnings of $1.54 per share represent a 5.5% year-over-year growth [5]. - The company's segment profit margin contracted by 42 basis points year-over-year to 9.6% in Q2 [5]. Stock Performance - TXT stock has increased by 80% from $50 in early January 2021 to around $90, compared to a 45% increase in the S&P 500 during the same period [2]. - The stock's returns were 60% in 2021, -8% in 2022, and 14% in 2023, indicating underperformance relative to the S&P 500 in 2023 [2]. Valuation and Outlook - Textron's stock is estimated to have a valuation of $100 per share, suggesting an upside of over 10% from current levels, based on a P/E ratio of 16x expected earnings of $6.27 per share in 2024 [4]. - The company maintains its earnings outlook for 2024 in the range of $6.20 to $6.40 per share, anticipating continued benefits from military program contributions and higher deliveries [6].