TXT

Industrials

Textron

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Market Data

Financials

XBRL · SEC EDGAR

2009–2026(18yr)

Revenue

Net Income

Free CF

Metric	FY 2009	FY 2010	FY 2011	FY 2011	FY 2012	FY 2013	FY 2015	FY 2016	FY 2016	FY 2017	FY 2018	FY 2020	FY 2021	FY 2022	FY 2022	FY 2023	FY 2024	FY 2026Latest	YoY
Revenue	$14.0B	$10.5B	$10.5B	$11.3B	$12.2B	$12.1B	$13.9B	$13.4B	$13.8B	$14.2B	$14.0B	$13.6B	$11.7B	$12.4B	$12.9B	$13.7B	$13.7B	$14.8B	+8.0%
Gross Profit	$3.4B	$2.0B	$1.9B	$2.0B	$2.2B	$2.0B	$2.5B	$2.4B	$2.5B	$2.4B	$2.4B	$2.2B	$1.6B	—	—	—	—	—	—
Gross Margin	24.5%	19.4%	18.2%	17.4%	18.1%	16.3%	17.7%	18.2%	18.0%	16.9%	17.0%	16.3%	13.4%	—	—	—	—	—	—
Net Income	$486.0M	-$31.0M	$86.0M	$242.0M	$589.0M	$498.0M	$600.0M	$697.0M	$962.0M	$307.0M	$1.2B	$815.0M	$309.0M	$746.0M	$861.0M	$921.0M	$824.0M	$921.0M	+11.8%
Net Margin	3.5%	-0.3%	0.8%	2.1%	4.8%	4.1%	4.3%	5.2%	7.0%	2.2%	8.7%	6.0%	2.7%	6.0%	6.7%	6.7%	6.0%	6.2%	+0.2pp
Free Cash Flow	$205.0M	$777.0M	$714.0M	$640.0M	$447.0M	$366.0M	$779.0M	$670.0M	$566.0M	$530.0M	$738.0M	$675.0M	$451.0M	$1.2B	$1.1B	$864.0M	$650.0M	$929.0M	+42.9%
FCF Margin	1.5%	7.4%	6.8%	5.7%	3.7%	3.0%	5.6%	5.0%	4.1%	3.7%	5.3%	5.0%	3.9%	9.9%	8.8%	6.3%	4.7%	6.3%	+1.5pp
EPS (Diluted)	$1.94	$-0.12	$0.28	$0.79	$2.00	$1.75	$2.13	$2.50	$3.53	$1.14	$4.83	$3.58	$1.36	$3.30	$4.01	$4.56	$4.33	$5.11	+18.0%

Cash & Equiv.$1.3B

3 min read

1. THE BIG PICTURE

Textron is currently a story of segment-level divergence, where surging demand for business jets and military tiltrotors is masking structural margin laggardness compared to its industrial peers. While Textron is successfully scaling its flagship MV-75 and Citation programs, it remains a lower-margin operator that relies on aggressive share repurchases rather than superior operational efficiency to drive shareholder value.

2. WHERE THE RISKS HIT HARDEST

Textron’s "global network of more than 20 service centers" is threatened by cyclical aircraft demand because unexpected order cancellations or deferrals directly reduce the high-margin aftermarket parts and maintenance volume that sustains this infrastructure (10-K Item 1, Risks). The strategic priority of the MV-75 program is specifically vulnerable to U.S. Government concentration risk; any funding delays or "convenience terminations" would leave Textron unable to recover massive capital investments made for specialized production facilities (10-K Item 1, Risks). Finally, the push for "technically advanced" products like the 525 Relentless is threatened by fixed-price contract exposure, where unforeseen technological hurdles must be absorbed entirely by Textron, threatening to erode its 6.5% net margin (10-K Item 1, XBRL).

3. WHAT THE NUMBERS SAY TOGETHER

Textron’s 36% revenue surge in Aviation during the fourth quarter of 2025 represents a sharp recovery from 2024 labor strikes, but this top-line momentum has not yet translated into peer-leading profitability. Despite the growth, Textron’s 6.5% net margin and 3.8% FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin rank 5th out of 6 peers, trailing diversified industrials like Dover which maintains a 14.5% net margin (XBRL, Peer Benchmarking). The divergence between the 8.0% TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth and the lower FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin suggests that the capital-intensive nature of ramping up the MV-75 and new Citation models is currently weighing on cash conversion. Short interest stands at 4.1% of the float, indicating a moderate level of market skepticism regarding the execution of fixed-price defense contracts (Supplemental Signals).

4. IS IT WORTH IT AT THIS PRICE?

At 12.8x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, Textron trades at a 35% discount to the peer median of 19.8x, making it the cheapest in its group (Peer Benchmarking). This discount is justified by a 3.8% FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin that is less than half that of peers like Leidos or General Dynamics. At this valuation, the market is pricing in ~1.8% long-term growth (CAPM analysis). This appears to be an attractive valuation given that Textron is returning 5.2% of its market cap to shareholders via buybacks—the highest in the peer group—which provides a significant floor for EPSEPSEarnings Per Share — the company's net profit divided by its share count; the most common per-share profitability metric growth even if net income remains stable. If long-term growth aligns with a standard GDP pace of 2.5%, the justified multiple would rise to 14.0x (CAPM analysis).

5. WHAT WOULD CHANGE THIS VIEW?

Cautious if FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin fails to expand as the Aviation segment moves past its recent strike recovery and into steady-state production of the Gen3 Citations.
Constructive if the MV-75 program transitions from the Engineering and Manufacturing Development phase into full-rate production without the U.S. Government exercising termination options.
Cautious if fixed-price contract costs in the Systems or Bell segments lead to further margin compression below the current 6.5% level.

6. BOTTOM LINE

Structural Advantage: A global, 24/7 aviation service infrastructure and proprietary tiltrotor technology that create high switching costs for military and commercial operators. Bottom Line: Textron is an attractively valued industrial play that uses aggressive buybacks to compensate for its structural margin disadvantage relative to aerospace peers.

Source: Synthesis · LLM Analysis

3 min read

1. Top 5 Material Risks

Cyclical Aircraft Demand: Demand for business jets, turbo props, and commercial helicopters is difficult to forecast and prone to unexpected events, which can lead to order rescheduling, deferrals, or cancellations that directly impact cash flows and results of operations.
U.S. Government Concentration: With 27% of 2025 revenues derived from U.S. Government entities, Textron is highly sensitive to shifts in defense priorities, budget legislation, and the specific funding status of the MV-75 program at Bell.
Contract Termination Risk: The U.S. Government may terminate contracts for convenience or default; while convenience terminations provide some cost reimbursement, they do not cover capital investments for facilities or anticipated profits, and default terminations can lead to liability for re-procurement costs.
Procurement Compliance: Failure to comply with complex U.S. Government procurement regulations—including cost disclosure and cybersecurity standards—can result in contract suspension, debarment, withheld payments, or the loss of export privileges.
Fixed-Price Contract Exposure: Under fixed-price contracts, Textron absorbs all costs exceeding the agreed price, meaning unforeseen technological hurdles, labor shortages, or inflation can directly erode profitability and cash flow.

2. Company-Specific Risks

Labor Union Disputes: Approximately 7,700 (29%) of U.S. employees are represented by unions; past strikes, such as the September 2024 Textron Aviation strike, have directly reduced revenues and segment profit.
Finance Segment Portfolio Quality: The Finance segment’s performance is tied to the quality of its loan and lease portfolio, which is particularly vulnerable to borrower defaults in cross-border aircraft transactions.
eAviation Development: The long-term strategy for Textron eAviation depends on the successful development and certification of electric and hybrid-electric aircraft, which carries risks of technological failure, cost overruns, and potential product liability.
USMCA Tariff Uncertainty: A significant portion of aircraft parts are manufactured in Canada and Mexico under USMCA rules; the 2026 mandatory six-year review creates uncertainty regarding the continuation of preferential tariff treatment.

3. Regulatory/Legal Risks

DCAA/DCMA Audits: Textron is subject to routine audits of its accounting, estimating, and material management systems; findings of improper activity can lead to civil/criminal penalties, profit forfeiture, or payment withholding.
Consumer Product Safety: As a distributor of consumer products, Textron is subject to the Consumer Product Safety Act, which empowers the CPSC to mandate costly product recalls, repairs, or refunds.
Climate Change Regulation: Increasing global regulations regarding greenhouse gas emissions and environmental reporting require additional internal resources and capital investment, potentially increasing costs and impacting competitive positioning.
Intellectual Property Litigation: Textron faces risks from third-party infringement claims, which can result in costly indemnification payments or legal restrictions on the sale of material product lines.

4. Financial Impact Map

Cyclical Aircraft Demand → Cash Flows and Results of Operations → Potential for material adverse effect if orders are deferred or cancelled. U.S. Government Concentration → Revenues and Backlog → 27% of 2025 revenues are at risk from budget changes or MV-75 program funding delays. Contract Termination → Backlog and Results of Operations → Termination reduces backlog by the expected value of remaining work and may result in unrecovered capital investment costs. Fixed-Price Contract Cost Overruns → Profitability and Cash Flows → Unforeseen inflation or labor shortages directly reduce margins as Textron absorbs costs above the fixed price. Labor Union Strikes → Revenues and Segment Profit → Work stoppages directly impact the ability to meet production schedules, as seen in the 2024 Textron Aviation strike.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
14A	Mar 2026	—
10-K	Feb 2026	Jan 2026
8-K	Jan 2026	—
10-Q	Oct 2025	Sep 2025