Textron Inc. (TXT) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Textron Inc.

Updated on October 3, 2026 · accounts published on July 28, 2026

Reading of October 3, 2026: A growing industrial with improving margins

Textron trades at a P/E of 14.6 over the last 12 months, 45 % below its sector median of 26.3 and 14 % under its own ten-year median.

• Is Textron expensive or cheap? Textron's P/E of 14.6 sits 45 % below its sector median and 14 % under its own ten-year median of 16.9.
• How is the business doing? Revenue grew 8 % and EPS 18 % over the last 12 months, with an 8.3 % operating margin above its 7.0 % long-run average.
• How strong is the balance sheet? Net debt was 1.4× EBITDA in fiscal 2025, about 17 % of the share price, well inside the 3.0× ceiling for industrials.
• What to expect from the next earnings? Analysts expect EPS of $1.52 when Textron reports on October 22, 2026, below the $1.62 delivered last quarter.
• Does Textron turn its margin into cash, and at what multiple of the cycle does it trade? Free cash flow equalled 96 % of net income in fiscal 2025, and EV/EBITDA of 9.2 sits below its 12.0 seven-year average.

Is Textron expensive or cheap?

Over the last 12 months Textron trades at a P/E of 14.6, against a sector median of 26.3 across 309 companies, a 45 % discount. Its own history tells a milder story: the ten-year median is 16.9, and the stock has traded cheaper than today only 32 % of the time in the last decade, within a range of 6.0 to 23.2. EV/EBITDA of 9.2 compares with a seven-year average of 12.0. The shares are down 10 % over 12 months and sit 24 % below their 52-week high of $100.77, so the market is pricing in caution.

How is the business doing?

Growth is the strong part of the picture. Over the last 12 months revenue rose 8 % and EPS 18 %, and revenue per share compounded at 9.8 % a year in fiscal 2020-2025, above the 6 % that counts as healthy for an industrial. Margins have improved: the operating margin of 8.3 % beats the 7.0 % average of fiscal 2014-2025. Returns on capital are the weak spot. ROIC of 7.4 % is 1.3 points below the sector median of 8.7 % and has not topped 10 % in any of the last ten fiscal years.

How strong is the balance sheet?

Leverage is moderate. Debt to equity stands at 0.47 and the current ratio at 1.86 over the last 12 months, and fiscal 2025 net debt of $13.06 per share equals 16.9 % of the current price. The Altman Z of 2.6 lands in the grey zone between 1.81 and 2.99, a level that deserves monitoring, while a Piotroski score of 7 of 9 signals solid financial quality. Shareholders receive almost nothing in cash: the dividend yield is 0.1 % and the fiscal 2025 payout was 2 % of earnings, leaving a 5.6 % free cash flow yield largely at the company's disposal.

What to expect from the next earnings?

Textron has beaten EPS estimates in 7 of the last 8 quarters. On July 28, 2026 it reported $1.62 against $1.55 expected, a 4.5 % surprise. For the quarter due October 22, 2026, the consensus is $1.52. Expectations for 2027 are steady: the EPS consensus has held at $6.47 over the last 18 days among 10 analysts, and the revenue estimate barely moved. Of the 29 analysts covering the stock, 13 rate it a buy, 16 a hold and none a sell, a lukewarm stance that matches the 10 % slide in the shares over the year.

Does Textron turn its margin into cash, and at what multiple of the cycle does it trade?

Aerospace, defence and machinery are semi-cyclical, so a single year's earnings can flatter or punish a stock. That is why this sector is judged on operating margin, cash conversion and multiples measured against the cycle. Textron converts well: fiscal 2025 free cash flow was 96 % of net income, above the 85 % healthy mark. Its 8.4 % operating margin in fiscal 2025 falls short of the 12 % benchmark, and ROIC of 7.4 % trails the 15 % bar. Capex at 2.6 % of revenue sits below the usual 4-8 % band. On the cycle, the P/E of 14.6 is under its 16.0 ten-year average.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.