Value
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.2 |
| P/S | 9.6 |
| EV/EBITDA | 5.0 |
| Fwd P/E | 8.6 |
| PEG | 6.2 |
| Analyst target | 4.0 |
- ▸Forward P/E: 13.1x
- ▸PEG: 1.20
TXT · Why this verdict
Why Textron (TXT) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.9/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Textron has delivered four consecutive quarterly earnings beats and sports strong price momentum above all moving averages, but with the stock trading above the analyst consensus target and a put/call ratio of 2.45 signaling elevated hedging demand, the near-term upside is exhausted.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At the current price of $93.75, the stock sits 0.7% above the analyst consensus price target of $93.11, leaving no margin of safety and flipping the asymmetry ratio to -0.11. Targets | Analyst consensus target rises above $105, restoring at least 12% upside from current levels. | ↓Deteriorating |
| CounterAnalyst targets lag price action in high-momentum names and could be revised upward following strong upcoming quarterly results in 37 days. | ||
Textron has beaten analyst earnings estimates in all four of the last four quarters with an average positive surprise of 6.6%, demonstrating consistent execution in its aerospace and defense business. Earnings | The beat streak extends to at least 6 of 8 quarters and average surprise remains above 3% over the next year. | →Stable |
| CounterWith a forward price-to-earnings ratio of 12.8x and a PEG of 1.21, earnings upside may already be priced in, limiting the incremental value of further beats. | ||
Textron trades above its 200-day moving average with strong MACD and rising on-balance volume, reflecting broad-based buying interest that has pushed the stock into a breakout pattern. Momentum breakdown | Price sustains above the 200-day moving average and on-balance volume continues to rise over the next 12 months. | ↑Improving |
| CounterThe stock is already above the analyst price target by 0.7%, meaning momentum buyers may find no fundamental anchor to support further advances. | ||
The options market shows a put/call ratio of 2.45 and implied volatility of 61%, indicating that institutional traders are paying substantial premiums to hedge against a significant downside move. Options | Put/call ratio falls below 1.5 within 6 months as hedging demand normalizes after the earnings catalyst. | ↓Deteriorating |
| CounterElevated put/call ratios can be contrarian bullish signals if they reflect excessive fear rather than informed bearish positioning. | ||
At the current price of $93.75, the stock sits 0.7% above the analyst consensus price target of $93.11, leaving no margin of safety and flipping the asymmetry ratio to -0.11.
↓DeterioratingTargets
- Expectation
- Analyst consensus target rises above $105, restoring at least 12% upside from current levels.
CounterAnalyst targets lag price action in high-momentum names and could be revised upward following strong upcoming quarterly results in 37 days.
Textron has beaten analyst earnings estimates in all four of the last four quarters with an average positive surprise of 6.6%, demonstrating consistent execution in its aerospace and defense business.
→StableEarnings
- Expectation
- The beat streak extends to at least 6 of 8 quarters and average surprise remains above 3% over the next year.
CounterWith a forward price-to-earnings ratio of 12.8x and a PEG of 1.21, earnings upside may already be priced in, limiting the incremental value of further beats.
Textron trades above its 200-day moving average with strong MACD and rising on-balance volume, reflecting broad-based buying interest that has pushed the stock into a breakout pattern.
↑ImprovingMomentum breakdown
- Expectation
- Price sustains above the 200-day moving average and on-balance volume continues to rise over the next 12 months.
CounterThe stock is already above the analyst price target by 0.7%, meaning momentum buyers may find no fundamental anchor to support further advances.
The options market shows a put/call ratio of 2.45 and implied volatility of 61%, indicating that institutional traders are paying substantial premiums to hedge against a significant downside move.
↓DeterioratingOptions
- Expectation
- Put/call ratio falls below 1.5 within 6 months as hedging demand normalizes after the earnings catalyst.
CounterElevated put/call ratios can be contrarian bullish signals if they reflect excessive fear rather than informed bearish positioning.
Per-dimension breakdown
Quality
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.1 |
| ROA | 3.0 |
| Gross margin | 0.0 |
| Op margin | 3.2 |
| Net margin | 3.1 |
| Current ratio | 6.5 |
| FCF quality | 5.1 |
| Moat | 6.1 |
| Piotroski F | 8.9 |
- ▸Earnings quality warning: 67% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
4.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.4 |
| EPS growth | 4.1 |
Momentum
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 1.5 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.3 |
| Price target | 6.0 |
| erm sentiment | 5.0 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Negligible insider buying — $754,286 (0.005% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.3 |
| quality rank | 5.8 |
| growth rank | 2.6 |
- ▸Attractive P/E vs peers
Technical
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.6 |
| 52w position | 8.8 |
Risk (lower is worse)
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.8 |
| days to cover | 6.7 |
| volatility | 6.6 |
| put call | 6.7 |
| implied vol | 6.6 |
| beta | 7.6 |
| debt equity | 7.8 |
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.8 |
| dividend safety | 6.8 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 3 days
How the verdict was assembled
Engine trigger
Downgraded from BUY WAIT — price $95.53 has reached target $94.07. No upside to wait for.
Engine technical detail
verdict_path:
L3:NEWS_BLOCK|SANITY:WAIT+price>=TPPassed (6)
- MOMENTUM:7.2>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.5=NEGATIVE
- EARNINGS_PROXIMITY:3d<=7d
Warning (0)
none
Reward-to-Risk
-0.53
Upside
-4.0%
Downside
7.6%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 55, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
A recent news event triggered an L3 news-block on the verdict path. Trigger: Downgraded from BUY WAIT — price $95.53 has reached target $94.07. No upside to wait for. The 10-dimension scores remain Insider at 7.3 (strongest), but ASYMMETRY:-0.5=NEGATIVE also fails — the news block is the proximate trigger, not the sole driver.
The strongest dimensions are Insider at 7.3, Momentum at 7.2, and Risk (lower is worse) at 7.1; the weakest are Technical at 3.1, Quality at 4.4, and Growth at 4.8. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.53 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Four Quarter Beat Streak
Trip ifEarnings surprise falls below 0% in at least 2 of the next 4 quarters, breaking the perfect beat streak.
- P2Momentum Above All Mas
Trip ifPrice drops below $89, more than 5% below the current $93.75, with the 200-day moving average acting as resistance rather than support.
- P3Elevated Put Call Hedging
Trip ifPut/call ratio rises above 3.0, indicating hedging demand has increased by more than 20% from current elevated levels.
- P4Target Exhausted No Upside
Trip ifAnalyst consensus price target falls below $88, implying downside greater than 6% from the current price of $93.75.