How Will Textron (TXT) Stock Be Affected Today by This Analyst Action?

NEW YORK (TheStreet) -- Shares of Textron Inc. (TXT) are up 2.08% to $36.28 in early morning trading after the company's rating was raised to "buy" from "hold" at Stifel, Nicolaus.

Stifel says it increased the multi-industry company to a "buy" rating because new products should drive near-term growth.

The firm set a $44 price target for Textron.

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TheStreet Ratings team rates TEXTRON INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate TEXTRON INC (TXT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 1.3%. Since the same quarter one year prior, revenues rose by 23.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Aerospace & Defense industry average. The net income increased by 27.4% when compared to the same quarter one year prior, rising from $113.00 million to $144.00 million.
  • Net operating cash flow has significantly increased by 640.00% to $378.00 million when compared to the same quarter last year. In addition, TEXTRON INC has also vastly surpassed the industry average cash flow growth rate of -19.45%.
  • Powered by its strong earnings growth of 27.50% and other important driving factors, this stock has surged by 25.34% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • TEXTRON INC has improved earnings per share by 27.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TEXTRON INC reported lower earnings of $1.75 versus $1.97 in the prior year. This year, the market expects an improvement in earnings ($2.11 versus $1.75).
  • You can view the full analysis from the report here: TXT Ratings Report
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