Textron: A Report To Forget

Textron Inc. delivered a mixed Q2, with modest beats but slowing Aviation growth and muted Industrial performance, yet I maintain my Buy rating. TXT's valuation remains compelling at 14.8x forward earnings, well below peers, with a price target of $120 based on 18x $6.69 EPS. The ongoing Industrial segment sale or spin-off process is a key near-term catalyst, expected to unlock shareholder value and reduce valuation discount. I anticipate Aviation deliveries and profitability to accelerate in H2, with Bell and Systems segments providing steady high-single digit growth.

Textron Inc. ( TXT ) reported Q2 earnings this week and the market was pretty underwhelmed by what transpired. Despite the negative earnings reaction today, the print itself wasn't all that bad. There were positives and