Has Textron Stock Reached Its Near-Term Potential?

TXT: Textron logo

The shares of Textron (NYSE: TXT) have been surging ahead in recent weeks despite expectations of slow growth in the commercial airline industry. Notably, the company’s business from commercial customers, which accounts for almost 70% of total revenues, observed a 20% contraction last year. In Q1, the commercial business observed an uptick from Bell and the Industrial segment while the Aviation segment continued to show a lukewarm performance.

According to the Trefis Machine Learning Engine, which identifies trends in the company’s historical stock price data, Textron stock will likely gain 2.2% over the next one month (twenty-one trading days) considering the 2.9% gain in the past week (five trading days).

But how would these numbers change if you are interested in holding Textron stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test Textron stock chances of a rise after a fall. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day!

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MACHINE LEARNING ENGINE – try it yourself:

IF TXT stock moved by -5% over five trading days, THEN over the next twenty-one trading days, TXT stock moves an average of 1.6 percent, with a 56.4% probability of a positive return over this period.

Also, given a -5% movement for the stock over 5 trading days, it has historically witnessed an excess return of -0.1% compared to the S&P500 over the next 21 trading days, with a 48% percent probability of a positive excess return.

Some Fun Scenarios, FAQs & Making Sense of Textron Stock Movements:

Question 1: Is the average return for Textron stock higher after a drop?

Answer: Consider two situations,

Case 1: Textron stock drops by -5% or more in a week

Case 2: Textron stock rises by 5% or more in a week

Is the average return for Textron stock higher over the subsequent month after Case 1 or Case 2?

TXT stock fares better after Case 2, with an average return of 1.6% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 2.8% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how Textron stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer: If you buy and hold Textron stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For TXT stock, the returns over the next N days after a -5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:

You can try the engine to see what this table looks like for Textron after a larger loss over the last week, month, or quarter.

Question 3: What about the average return after a rise if you wait for a while?


The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although TXT stock appears to be an exception to this general observation.

TXT’s returns over the next N days after a 5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:

It’s pretty powerful to test the trend for yourself for Textron stock by changing the inputs in the charts above.

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market since 2016.

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