Textron stock (NYSE: TXT) is set to report its Q2 2024 results on Thursday, July 18. Analysts expect the company’s revenue and earnings to align with street estimates, with little room for growth post-Q2. Textron is expected to continue benefiting from higher aircraft and aftermarket volume. The company’s stock has seen strong gains in recent years, but its performance has been inconsistent compared to the S&P 500. Despite underperforming in 2023, Textron has the potential to see a strong jump depending on macroeconomic conditions.
Textron’s valuation is estimated to be $100 per share, reflecting a potential upside of 10% from its current trading levels. The company’s previous quarter saw manufacturing revenues increase by 3.6% year-over-year, driven by growth in the Bell segment. Higher revenues and margin expansion led to a 14% growth in the bottom line. For the current quarter, Textron is expected to benefit from increased aftermarket demand and higher jet and turboprop deliveries. However, sales growth in the Industrial segment may remain tepid.
Textron’s Peers play a crucial role in assessing its performance. The company’s stock looks to have limited growth potential, but a positive Q2 performance and outlook raise could potentially drive it higher post-results. The uncertain macroeconomic environment, including high oil prices and elevated interest rates, could impact the company’s performance in the coming months. From a valuation perspective, Textron’s stock has limited room for growth, with a forecasted upside of just 10% based on expected 2024 adjusted earnings.
The Trefis High Quality Portfolio, which includes 30 stocks, has consistently outperformed the S&P 500 over recent years. This suggests that as a group, HQ Portfolio stocks provided better returns with less risk compared to the benchmark index. Textron’s performance in Q2 is expected to align with street expectations, driven by increased aftermarket demand and higher deliveries in the aviation segment. The Bell segment is benefiting from higher volumes from the Future Long Range Assault Aircraft program, which is expected to continue in the near term.
In conclusion, Textron’s Q2 performance is expected to be in line with street estimates, with limited room for growth from a valuation perspective. However, if the company reports a strong Q2 and raises its outlook, the stock could see higher levels post-announcement. The dynamics of the macroeconomic environment and the company’s ability to capitalize on market trends will be critical factors driving Textron’s performance in the upcoming months.
