TXT - Embedded Expectations Analysis - 2018 12 11
Textron Inc. (TXT:USA) currently trades near corporate averages relative toUAFRS-based (Uniform) Earnings, with a 17.6x Uniform P/E. At these levels, the market has muted expectations for the firm, and management is concerned about their marketing strategies, relations with NetJets, pricing, and cost efficiencies
Specifically, management appears concerned about their marketing strategies, and may lack confidence in the relationship between NetJets and Textron Aviation. Additionally, they may lack confidence in NetJets' ability to ramp up their sales and marketing efforts, and may be exaggerating the unique market opportunities for their Hemisphere jet. They may also lack confidence in their ability to fix pricing issues in their vehicle business, and may be concerned about their pricing performance in the Industrial segment. Moreover, they may lack confidence in their ability to improve cost efficiencies through their automation initiatives, and may be concerned about continuous vehicle launch delays
Textron is a multi-industry company. The company's segments include: Textron Aviation, which manufactures, sells and services Beechcraft and Cessna aircraft, and services the Hawker brand of business jets; Bell, which supplies military and commercial helicopters, tiltrotor aircraft, and related spare parts and services; Textron Systems, which includes unmanned systems, marine and land systems, and simulation, training and other; Industrial, which designs and manufactures a variety of products within fuel systems and functional components and specialized vehicles product lines; and Finance, which provides financing to purchasers of new and pre-owned Textron Aviation aircraft and Bell helicopters.
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