Intrinsic value of Textron - TXT

Previous Close

$48.06

  Intrinsic Value

$48.18

stock screener

  Rating & Target

hold

0%

  Value-price divergence*

-41%

Previous close

$48.06

 
Intrinsic value

$48.18

 
Up/down potential

0%

 
Rating

hold

 
Value-price divergence*

-41%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of TXT stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 12.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.72
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  13,788
  14,064
  14,387
  14,757
  15,172
  15,632
  16,137
  16,686
  17,281
  17,922
  18,610
  19,346
  20,131
  20,967
  21,855
  22,798
  23,797
  24,855
  25,973
  27,155
  28,403
  29,719
  31,107
  32,571
  34,113
  35,737
  37,447
  39,247
  41,140
  43,133
  45,229
Variable operating expenses, $m
 
  12,864
  13,155
  13,488
  13,861
  14,275
  14,729
  15,224
  15,759
  16,335
  16,954
  17,405
  18,111
  18,863
  19,663
  20,511
  21,410
  22,361
  23,367
  24,431
  25,553
  26,738
  27,987
  29,303
  30,691
  32,152
  33,690
  35,309
  37,013
  38,806
  40,691
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  12,738
  12,864
  13,155
  13,488
  13,861
  14,275
  14,729
  15,224
  15,759
  16,335
  16,954
  17,405
  18,111
  18,863
  19,663
  20,511
  21,410
  22,361
  23,367
  24,431
  25,553
  26,738
  27,987
  29,303
  30,691
  32,152
  33,690
  35,309
  37,013
  38,806
  40,691
Operating income, $m
  1,050
  1,200
  1,232
  1,269
  1,311
  1,357
  1,408
  1,463
  1,522
  1,587
  1,656
  1,941
  2,020
  2,103
  2,193
  2,287
  2,387
  2,494
  2,606
  2,724
  2,849
  2,982
  3,121
  3,268
  3,422
  3,585
  3,757
  3,937
  4,127
  4,327
  4,538
EBITDA, $m
  1,499
  1,692
  1,731
  1,776
  1,826
  1,881
  1,942
  2,008
  2,079
  2,156
  2,239
  2,328
  2,422
  2,523
  2,630
  2,743
  2,863
  2,991
  3,125
  3,267
  3,418
  3,576
  3,743
  3,919
  4,105
  4,300
  4,506
  4,722
  4,950
  5,190
  5,442
Interest expense (income), $m
  164
  149
  158
  167
  179
  192
  206
  221
  238
  256
  276
  297
  320
  344
  370
  397
  426
  457
  489
  524
  560
  598
  639
  681
  726
  774
  824
  876
  932
  990
  1,051
Earnings before tax, $m
  876
  1,050
  1,075
  1,102
  1,132
  1,165
  1,202
  1,241
  1,284
  1,330
  1,380
  1,644
  1,700
  1,759
  1,823
  1,890
  1,961
  2,037
  2,117
  2,201
  2,290
  2,383
  2,482
  2,586
  2,696
  2,812
  2,933
  3,061
  3,196
  3,338
  3,487
Tax expense, $m
  33
  284
  290
  297
  306
  315
  325
  335
  347
  359
  372
  444
  459
  475
  492
  510
  530
  550
  571
  594
  618
  643
  670
  698
  728
  759
  792
  827
  863
  901
  941
Net income, $m
  962
  767
  784
  804
  826
  851
  877
  906
  938
  971
  1,007
  1,200
  1,241
  1,284
  1,331
  1,380
  1,432
  1,487
  1,545
  1,607
  1,671
  1,740
  1,812
  1,888
  1,968
  2,052
  2,141
  2,235
  2,333
  2,436
  2,545

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,298
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  15,358
  14,336
  14,666
  15,043
  15,466
  15,935
  16,449
  17,009
  17,616
  18,269
  18,970
  19,720
  20,521
  21,373
  22,279
  23,240
  24,258
  25,336
  26,476
  27,681
  28,953
  30,295
  31,710
  33,202
  34,774
  36,429
  38,172
  40,007
  41,937
  43,968
  46,104
Adjusted assets (=assets-cash), $m
  14,060
  14,336
  14,666
  15,043
  15,466
  15,935
  16,449
  17,009
  17,616
  18,269
  18,970
  19,720
  20,521
  21,373
  22,279
  23,240
  24,258
  25,336
  26,476
  27,681
  28,953
  30,295
  31,710
  33,202
  34,774
  36,429
  38,172
  40,007
  41,937
  43,968
  46,104
Revenue / Adjusted assets
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
  0.981
Average production assets, $m
  3,312
  3,375
  3,453
  3,542
  3,641
  3,752
  3,873
  4,005
  4,147
  4,301
  4,466
  4,643
  4,831
  5,032
  5,245
  5,472
  5,711
  5,965
  6,234
  6,517
  6,817
  7,133
  7,466
  7,817
  8,187
  8,577
  8,987
  9,419
  9,874
  10,352
  10,855
Working capital, $m
  4,256
  3,389
  3,467
  3,556
  3,656
  3,767
  3,889
  4,021
  4,165
  4,319
  4,485
  4,662
  4,852
  5,053
  5,267
  5,494
  5,735
  5,990
  6,260
  6,544
  6,845
  7,162
  7,497
  7,850
  8,221
  8,613
  9,025
  9,458
  9,915
  10,395
  10,900
Total debt, $m
  3,680
  3,501
  3,722
  3,975
  4,258
  4,572
  4,917
  5,292
  5,699
  6,136
  6,606
  7,109
  7,645
  8,216
  8,823
  9,467
  10,149
  10,871
  11,635
  12,442
  13,294
  14,193
  15,142
  16,141
  17,194
  18,303
  19,471
  20,700
  21,994
  23,355
  24,786
Total liabilities, $m
  9,784
  9,605
  9,826
  10,079
  10,362
  10,676
  11,021
  11,396
  11,803
  12,240
  12,710
  13,213
  13,749
  14,320
  14,927
  15,571
  16,253
  16,975
  17,739
  18,546
  19,398
  20,297
  21,246
  22,245
  23,298
  24,407
  25,575
  26,804
  28,098
  29,459
  30,890
Total equity, $m
  5,574
  4,731
  4,840
  4,964
  5,104
  5,258
  5,428
  5,613
  5,813
  6,029
  6,260
  6,508
  6,772
  7,053
  7,352
  7,669
  8,005
  8,361
  8,737
  9,135
  9,554
  9,997
  10,464
  10,957
  11,475
  12,022
  12,597
  13,202
  13,839
  14,510
  15,214
Total liabilities and equity, $m
  15,358
  14,336
  14,666
  15,043
  15,466
  15,934
  16,449
  17,009
  17,616
  18,269
  18,970
  19,721
  20,521
  21,373
  22,279
  23,240
  24,258
  25,336
  26,476
  27,681
  28,952
  30,294
  31,710
  33,202
  34,773
  36,429
  38,172
  40,006
  41,937
  43,969
  46,104
Debt-to-equity ratio
  0.660
  0.740
  0.770
  0.800
  0.830
  0.870
  0.910
  0.940
  0.980
  1.020
  1.060
  1.090
  1.130
  1.160
  1.200
  1.230
  1.270
  1.300
  1.330
  1.360
  1.390
  1.420
  1.450
  1.470
  1.500
  1.520
  1.550
  1.570
  1.590
  1.610
  1.630
Adjusted equity ratio
  0.304
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  962
  767
  784
  804
  826
  851
  877
  906
  938
  971
  1,007
  1,200
  1,241
  1,284
  1,331
  1,380
  1,432
  1,487
  1,545
  1,607
  1,671
  1,740
  1,812
  1,888
  1,968
  2,052
  2,141
  2,235
  2,333
  2,436
  2,545
Depreciation, amort., depletion, $m
  449
  493
  499
  506
  515
  524
  534
  545
  557
  570
  583
  387
  403
  419
  437
  456
  476
  497
  519
  543
  568
  594
  622
  651
  682
  715
  749
  785
  823
  863
  905
Funds from operations, $m
  554
  1,259
  1,283
  1,311
  1,341
  1,375
  1,411
  1,451
  1,494
  1,541
  1,591
  1,587
  1,643
  1,704
  1,768
  1,836
  1,908
  1,984
  2,065
  2,150
  2,239
  2,334
  2,434
  2,539
  2,650
  2,767
  2,890
  3,020
  3,156
  3,299
  3,450
Change in working capital, $m
  -458
  66
  78
  89
  100
  111
  122
  132
  143
  154
  166
  177
  189
  201
  214
  227
  241
  255
  270
  285
  301
  317
  335
  353
  372
  391
  412
  434
  456
  480
  505
Cash from operations, $m
  1,012
  1,193
  1,206
  1,222
  1,241
  1,264
  1,290
  1,319
  1,351
  1,386
  1,425
  1,409
  1,454
  1,502
  1,554
  1,609
  1,667
  1,729
  1,795
  1,865
  1,939
  2,017
  2,100
  2,187
  2,279
  2,376
  2,478
  2,586
  2,699
  2,819
  2,945
Maintenance CAPEX, $m
  0
  -276
  -281
  -288
  -295
  -303
  -313
  -323
  -334
  -346
  -358
  -372
  -387
  -403
  -419
  -437
  -456
  -476
  -497
  -519
  -543
  -568
  -594
  -622
  -651
  -682
  -715
  -749
  -785
  -823
  -863
New CAPEX, $m
  -446
  -64
  -78
  -89
  -100
  -110
  -121
  -132
  -143
  -154
  -165
  -177
  -188
  -201
  -213
  -226
  -240
  -254
  -268
  -284
  -299
  -316
  -333
  -351
  -370
  -390
  -410
  -432
  -455
  -478
  -503
Cash from investing activities, $m
  -523
  -340
  -359
  -377
  -395
  -413
  -434
  -455
  -477
  -500
  -523
  -549
  -575
  -604
  -632
  -663
  -696
  -730
  -765
  -803
  -842
  -884
  -927
  -973
  -1,021
  -1,072
  -1,125
  -1,181
  -1,240
  -1,301
  -1,366
Free cash flow, $m
  489
  853
  847
  845
  846
  850
  856
  864
  875
  887
  901
  861
  879
  899
  921
  945
  971
  999
  1,030
  1,062
  1,096
  1,133
  1,172
  1,213
  1,257
  1,304
  1,353
  1,405
  1,460
  1,518
  1,579
Issuance/(repayment) of debt, $m
  68
  184
  221
  253
  284
  314
  345
  375
  406
  438
  470
  503
  536
  571
  607
  644
  682
  722
  764
  807
  852
  899
  948
  1,000
  1,053
  1,109
  1,168
  1,229
  1,293
  1,361
  1,431
Issuance/(repurchase) of shares, $m
  -205
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -146
  184
  221
  253
  284
  314
  345
  375
  406
  438
  470
  503
  536
  571
  607
  644
  682
  722
  764
  807
  852
  899
  948
  1,000
  1,053
  1,109
  1,168
  1,229
  1,293
  1,361
  1,431
Total cash flow (excl. dividends), $m
  315
  1,037
  1,068
  1,098
  1,130
  1,164
  1,201
  1,240
  1,281
  1,325
  1,371
  1,363
  1,415
  1,470
  1,528
  1,589
  1,654
  1,722
  1,793
  1,869
  1,948
  2,032
  2,120
  2,213
  2,310
  2,413
  2,521
  2,634
  2,753
  2,879
  3,010
Retained Cash Flow (-), $m
  -610
  -92
  -109
  -124
  -140
  -155
  -170
  -185
  -200
  -216
  -231
  -248
  -264
  -281
  -299
  -317
  -336
  -356
  -376
  -398
  -420
  -443
  -467
  -492
  -519
  -546
  -575
  -605
  -637
  -670
  -705
Prev. year cash balance distribution, $m
 
  935
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  1,880
  959
  973
  990
  1,009
  1,031
  1,055
  1,081
  1,109
  1,140
  1,116
  1,151
  1,189
  1,229
  1,272
  1,318
  1,366
  1,417
  1,471
  1,529
  1,589
  1,653
  1,721
  1,792
  1,867
  1,946
  2,029
  2,116
  2,208
  2,305
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  1,803
  878
  847
  815
  782
  748
  713
  676
  637
  598
  530
  491
  452
  413
  373
  335
  297
  261
  227
  194
  164
  137
  113
  91
  73
  57
  44
  33
  24
  17
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Textron Inc. operates in the aircraft, defense, industrial, and finance businesses worldwide. It operates through five segments: Textron Aviation, Bell, Textron Systems, Industrial, and Finance. The Textron Aviation segment manufactures and sells business jets, turboprop aircraft, piston engine aircraft, and military trainer and defense aircraft; and commercial parts, as well as provides maintenance, inspection, and repair services. The Bell segment provides military and commercial helicopters, tiltrotor aircraft, and related spare parts and services. The Textron Systems segment produces unmanned aircraft systems; smart weapons, airborne and ground-based sensors and surveillance systems, and protection systems; armored vehicles, turrets, and related subsystems, as well as marine craft; test equipment and electronic warfare test, and training solutions; piston aircraft engines; and intelligence software solutions. This segment also designs, develops, manufactures, installs, and maintains full flight simulators, as well as offers training services. The Industrial segment offers blow-molded plastic fuel systems, windshield and headlamp washer systems, catalytic reduction systems, and engine camshafts, as well as plastic bottles and containers; golf cars, off-road utility and light transportation vehicles, aviation ground support equipment, professional turf-maintenance equipment, and turf-care vehicles; and powered equipment, electrical test and measurement instruments, mechanical and hydraulic tools, cable connectors, fiber optic assemblies, underground and aerial transmission and distribution products, and power utility products used in the construction, maintenance, telecommunications, data communications, electrical, utility, and plumbing industries. The Finance segment provides financing to purchase new and pre-owned aircraft and helicopters. Textron Inc. was founded in 1923 and is headquartered in Providence, Rhode Island.

FINANCIAL RATIOS  of  Textron (TXT)

Valuation Ratios
P/E Ratio 13.5
Price to Sales 0.9
Price to Book 2.3
Price to Tangible Book
Price to Cash Flow 12.8
Price to Free Cash Flow 23
Growth Rates
Sales Growth Rate 2.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 6.2%
Cap. Spend. - 3 Yr. Gr. Rate 0.1%
Financial Strength
Quick Ratio 4
Current Ratio 0.1
LT Debt to Equity 59.5%
Total Debt to Equity 66%
Interest Coverage 6
Management Effectiveness
Return On Assets 7.4%
Ret/ On Assets - 3 Yr. Avg. 6.3%
Return On Total Capital 10.8%
Ret/ On T. Cap. - 3 Yr. Avg. 8.9%
Return On Equity 18.3%
Return On Equity - 3 Yr. Avg. 15.7%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 18%
Gross Margin - 3 Yr. Avg. 18%
EBITDA Margin 10.8%
EBITDA Margin - 3 Yr. Avg. 11.4%
Operating Margin 7.6%
Oper. Margin - 3 Yr. Avg. 7.9%
Pre-Tax Margin 6.4%
Pre-Tax Margin - 3 Yr. Avg. 6.6%
Net Profit Margin 7%
Net Profit Margin - 3 Yr. Avg. 5.5%
Effective Tax Rate 3.8%
Eff/ Tax Rate - 3 Yr. Avg. 20.3%
Payout Ratio 2.3%

TXT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TXT stock intrinsic value calculation we used $13788 million for the last fiscal year's total revenue generated by Textron. The default revenue input number comes from 2016 income statement of Textron. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our TXT stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for TXT is calculated based on our internal credit rating of Textron, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Textron.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of TXT stock the variable cost ratio is equal to 91.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for TXT stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.5% for Textron.

Corporate tax rate of 27% is the nominal tax rate for Textron. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the TXT stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for TXT are equal to 24%.

Life of production assets of 12 years is the average useful life of capital assets used in Textron operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for TXT is equal to 24.1%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $5574 million for Textron - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 266.841 million for Textron is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Textron at the current share price and the inputted number of shares is $12.8 billion.

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COMPANY NEWS

▶ Mattel trading at 2009 lows   [Aug-23-17 01:45PM  CNBC Videos]
▶ ETFs with exposure to Textron, Inc. : August 22, 2017   [Aug-22-17 04:17PM  Capital Cube]
▶ How to Invest in Military Stocks   [Aug-16-17 09:16AM  Motley Fool]
▶ 18 Things You Didn't Know About Polaris Industries Inc.   [Aug-12-17 07:19AM  Motley Fool]
▶ ETFs with exposure to Textron, Inc. : August 11, 2017   [Aug-11-17 07:01PM  Capital Cube]
▶ 6 Aerospace and Defense Companies Gurus Are Buying   [Aug-07-17 03:27PM  GuruFocus.com]
▶ [$$] The Air Capital of the World Has a Problem: Too Few Aviation Workers   [Aug-03-17 12:46AM  The Wall Street Journal]
▶ [$$] 'Air Capital of the World' Has a Problem: Too Few Aviation Workers   [Aug-02-17 09:20AM  The Wall Street Journal]
▶ Textron Declares Quarterly Dividend   [Jul-25-17 04:20PM  Business Wire]
▶ Textron tops Street 2Q forecasts   [Jul-19-17 09:02PM  Associated Press]
▶ Fewer turboprop deliveries drag down Textron's 2Q revenue   [01:40PM  American City Business Journals]
▶ ETFs with exposure to Textron, Inc. : July 14, 2017   [Jul-14-17 05:20PM  Capital Cube]
▶ Textron to Release Second Quarter Results on July 19, 2017   [Jun-19-17 10:30AM  Business Wire]
▶ Textron, Inc. Value Analysis (NYSE:TXT) : June 8, 2017   [Jun-08-17 02:19PM  Capital Cube]
▶ Better Buy: Polaris Industries Inc. vs. Textron   [Jun-01-17 09:32AM  Motley Fool]
▶ [$$] Honeywell to Decide on Aerospace Spinoff by the Fall   [12:26AM  The Wall Street Journal]
▶ [$$] Honeywell to Decide on Aerospace Spinoff by the Fall   [May-23-17 04:13PM  The Wall Street Journal]
▶ The New Weapon That Could Make Military Drones Even More Lethal   [May-19-17 07:19AM  The Fiscal Times]
▶ ETFs with exposure to Textron, Inc. : May 15, 2017   [May-15-17 04:48PM  Capital Cube]
▶ Textron Aviation ends the Cessna Citation Mustang   [May-11-17 04:51PM  American City Business Journals]
▶ Textron Surges on Takeover Talk   [04:02PM  TheStreet.com]
▶ ETFs with exposure to Textron, Inc. : May 2, 2017   [May-02-17 04:46PM  Capital Cube]
▶ [$$] Third Point Calls for Honeywell to Spin Off Aerospace Unit   [Apr-28-17 12:58AM  The Wall Street Journal]
▶ [$$] Third Point Calls for Honeywell to Spin Off Aerospace Unit   [Apr-27-17 07:48PM  The Wall Street Journal]
▶ Defense Stock Roundup: TXT, HON, LMT and COL   [Apr-26-17 04:03PM  Zacks]
▶ Textron Declares Quarterly Dividend   [10:20AM  Business Wire]
▶ Textron Takes the Lead in Robotic Warships   [Apr-24-17 10:13AM  Motley Fool]
▶ Why Textron Stock Tumbled After Earnings   [10:03AM  Motley Fool]
▶ 9 Stocks Primecap Management Continues to Buy   [Apr-20-17 04:42PM  GuruFocus.com]
▶ Textron: Stay The Course   [02:52PM  Barrons.com]
Financial statements of TXT
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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