Textron: Not My Favorite Aerospace And Defense Stock, But It Is A Strong Buy Now
Summarize this article with:
Dhierin BechaiInvesting Group LeaderFollow5ShareSavePlay(6min)CommentsFollow us on Google for the latest stock newsFollow Seeking Alpha on Google for the latest stock newsSummaryTextron is upgraded to strong buy, with the stock trading at a substantial discount to its median EV/EBITDA multiple.TXT's recent underperformance is attributed to geopolitical tensions, but revenue and EPS estimates have remained largely resilient.Despite modest 4.2% annual sales growth, I expect EBITDA and free cash flow CAGRs of around 10%, with margin improvement and debt reduction.TXT offers 28% upside to a $112.43 price target on current-year earnings, and up to 47% upside using 2027 estimates.Looking for more investing ideas like this one? Get them exclusively at The Aerospace Forum. Learn More » RyanFletcher/iStock via Getty Images Textron (TXT) is on my list of aerospace stocks that trade at a substantial discount to their median EV/EBITDA multiple, but that has rarely resulted in the stock showing strong performance. Since myThis article was written byDhierin Bechai23.68K FollowersFollowDhierin-Perkash Bechai is an aerospace, defense and airline analyst. Dhierin runs the investing group The Aerospace Forum, whose goal is to discover investment opportunities in the aerospace, defense and airline industry. With a background in aerospace engineering, he provides analysis of a complex industry with significant growth prospects, and offers context to developments as they occur, describing how they might affect investment theses. His investing ideas are driven by data informed analysis. The investing group also provides direct access to data analytics monitors. Learn more.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.