Key Takeaways
- Textron jumped 12% after adjusted EPS of $1.76 beat the $1.43 consensus, and it raised its outlook.
- Congress approved the Army’s MV-75 funding request, removing the earnings and cash flow hit Textron warned about in July.
- Cessna’s higher jet deliveries matter for Honeywell Aerospace and General Dynamics’ Gulfstream, and Huntington Ingalls also beat and raised this morning.
- Before the jump, Textron traded at 12x forward earnings, below its five-year average of 14x.
Textron (TXT) surged 12% on a Q3 beat and a raised outlook as it credited the raise to Congress funding Bell’s MV-75 Cheyenne for the Army.
Huntington Ingalls Industries (HII) beat and raised this morning too. And Cessna’s jet deliveries jumped. That matters for Gulfstream’s parent, General Dynamics (GD), and for Honeywell Aerospace (HONA), which makes the Citation Longitude’s engines.
The funding scare is over
Adjusted EPS came in at $1.76, well above the $1.43 consensus, on revenue of $3.8 billion.
Textron warned in its Q2 release that without the Army’s $350 million MV-75 request, adjusted EPS could take a $0.20-$0.30 hit and cash flow a $150-$250 million hit.
Congress approved it, “mitigating the risks discussed on our last earnings call,” CEO Lisa Atherton said on this morning’s call.
So Textron raised its 2026 adjusted EPS outlook to $6.55-$6.65, from $6.40-$6.60, and its cash flow outlook to $800-$900 million, from $700-$800 million.
Analysts already expected earnings to keep climbing through 2028.
The new range sits above that $6.47 for 2026, so estimates should rise.
Bell’s revenue fell 9%, mostly on lower MV-75 volume, while Textron Aviation’s rose 14% on 51 jet deliveries, up from 42.
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A good sign for Gulfstream, less so for Honeywell
General Dynamics reports later this week, which should show whether Gulfstream sees the same demand. Its Aerospace revenue rose 15.1% in Q2 on a 1.5 book-to-bill.
Honeywell Aerospace is down almost 10% as it held its full-year organic growth outlook at 4%-5%, and a few mechanical suppliers are still limiting its output. More Citations only help if Honeywell can build the engines.
Huntington Ingalls is up 13% after booking $32.4 billion of awards in the quarter. Its raised guidance had nothing to do with Congress.
Still cheap after the jump
Textron’s forward P/E ended yesterday at 12x, below its five-year average of 14x.
The recent move takes it to about 13x.
My take: with the MV-75 money in hand and guidance above the Street, there’s room for more upside, especially if Bell’s revenue turns back up. Of course, this approval only covers fiscal 2026, and the program will need Congress again.
So what is Textron stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
