Textron stock rating downgraded by Goldman Sachs on market share concerns

Published 01/07/2025, 10:54
Textron stock rating downgraded by Goldman Sachs on market share concerns

Investing.com - Goldman Sachs downgraded Textron (NYSE:TXT) from Buy to Neutral on Tuesday, setting a price target of $85.00 as the investment bank reassessed its outlook on the aerospace and defense company. The target sits below InvestingPro’s Fair Value calculation, though the company maintains solid fundamentals with a healthy current ratio of 1.8x.

The downgrade comes despite Goldman’s continued belief in tight business jet supply and demand dynamics and the potential earnings contribution from Textron’s Future Long-Range Assault Aircraft (FLRAA) program win.

Goldman Sachs noted that Textron appears to be losing market share in the business jet segment, while its Systems and Industrial divisions show limited growth potential.

The investment bank pointed out that while Textron trades at lower valuation multiples compared to many of its aerospace and defense peers, this valuation gap has persisted for years with no clear catalyst for change on the horizon. For deeper insights into Textron’s valuation and growth prospects, InvestingPro subscribers can access comprehensive analysis and additional ProTips, including details about the company’s aggressive share buyback program.

Despite maintaining the fundamental thesis that supported its previous Buy rating, Goldman Sachs indicated that anticipated stock upside has failed to materialize, prompting the downgrade to a Neutral stance. The stock currently trades at a P/E ratio of 17.9x, with analyst targets ranging from $71 to $107 per share.

In other recent news, Textron Inc . reported first-quarter 2025 earnings that exceeded analyst expectations, with an adjusted income of $1.28 per share, surpassing the forecast of $1.16. The company’s revenue also beat predictions, reaching $3.3 billion compared to the anticipated $3.25 billion. Jefferies upgraded Textron’s stock price target from $85 to $95, maintaining a Buy rating, following their Business Aviation Summit. This upgrade reflects optimism about Textron’s near-term product launches and strong demand for its aircraft models. Additionally, Textron held its 2025 Annual Meeting of Shareholders, where all nominated directors were elected, and executive compensation was approved. The shareholders also ratified the appointment of Ernst & Young LLP as the independent registered public accounting firm for the fiscal year 2025. These developments highlight Textron’s ongoing strategic initiatives and governance activities.

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