NYSE:TXT), is not the largest company out there, but it received a lot of attention from a substantial price increase on the NYSE over the last few months. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at Textron’s outlook and value based on the most recent financial data to see if the opportunity still exists.” data-reactid=”28″>Textron Inc. (NYSE:TXT), is not the largest company out there, but it received a lot of attention from a substantial price increase on the NYSE over the last few months. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at Textron’s outlook and value based on the most recent financial data to see if the opportunity still exists.
Check out our latest analysis for Textron ” data-reactid=”29″> Check out our latest analysis for Textron
Is Textron still cheap?
The share price seems sensible at the moment according to my price multiple model, where I compare the company’s price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 23.67x is currently trading slightly below its industry peers’ ratio of 24.48x, which means if you buy Textron today, you’d be paying a decent price for it. And if you believe Textron should be trading in this range, then there isn’t much room for the share price to grow beyond the levels of other industry peers over the long-term. Is there another opportunity to buy low in the future? Since Textron’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What does the future of Textron look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With profit expected to grow by 68% over the next couple of years, the future seems bright for Textron. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
3 warning signs (and 1 which is a bit unpleasant) we think you should know about.” data-reactid=”53″>So if you’d like to dive deeper into this stock, it’s crucial to consider any risks it’s facing. For example, Textron has 3 warning signs (and 1 which is a bit unpleasant) we think you should know about.
50 other stocks with a high growth potential.” data-reactid=”54″>If you are no longer interested in Textron, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Get in touch with us directly. Alternatively, email [email protected].” data-reactid=”55″>This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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