Could Textron Be The Value Stock For Your Portfolio?

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Shares of Textron (TXT) trade at 14.5 times earnings, compared with 22.6 for the median S&P 500 company. The stock lost 3.7% over a year in which the S&P 500 returned 15.0%. This makes the maker of Citation jets and Bell helicopters either a sound business on sale, or a fairly priced company with lagging jet factories. So is the profit behind that low multiple growing?

Textron’s Profit Grew Faster Than Revenue

So far, yes. Textron’s net income rose 14.8% from a year earlier over the four fiscal quarters ended July 4, 2026, while revenue grew 8.8%. The low multiple is based on rising earnings, not shrinking ones. Growth slowed in the latest quarter, however. Revenue for fiscal Q2 2026 rose 3.0% from a year earlier, and net income barely moved.

Customer demand remains very strong, management said on the fiscal Q2 2026 earnings call. NetJets took its first Ascend jets in that quarter. Textron also generates cash. Free cash flow over the last twelve months equals 5.6% of the company’s market value, and Textron spent $209 million buying back its own shares in fiscal Q2 2026.

Textron Earns Thinner Margins Than Two Years Ago

Textron recorded a 17.8% gross margin over the four fiscal quarters ended July 4, 2026. That figure marks a drop from 22.6% two years earlier, and it sits below the company’s 19.3% average across the last three twelve-month periods. An operating margin of 6.7% compares with 18.5% for the median S&P 500 company, leaving Textron with far less of each sale than the typical large business.

Textron is not yet getting more jets out of its factories. The company delivered 40 jets in fiscal Q2 2026, compared with 49 a year earlier, even as its turboprop and Bell helicopter deliveries rose. Manufacturing inefficiencies and lower aircraft volume cut profit in the aircraft business by 3% in the quarter, management said. Management said the big change at Cessna, Beechcraft and its suppliers was a wave of workforce turnover five or six years ago, adding that about half of the current workforce now has less than five years of experience.

How Is Textron Trying To Fix Its Factories?

Textron is adding capacity in landing gear, milling, and paint, and the company is expanding dual sourcing of parts, management said on the July call. Management’s goal is to start seeing better deliveries toward the middle to last part of 2027, though executives said they could not give exact dates. Textron is also pursuing a sale or a spin-off of its Industrial segment as a step toward becoming a pure-play aerospace and defense company.

The low multiple is measured on past profit, and the full-year 2026 earnings guide comes with a condition. Management reiterated its guide of $6.40 to $6.60 in adjusted earnings per share, its own measure. That guide assumes additional fiscal 2026 funding for the MV-75 Cheyenne program. Textron said in July it would pay for the program itself until the government’s fiscal year ended. That year has since ended, making Textron’s next quarterly report the first chance to learn whether the money came. Without those funds, management said adjusted earnings per share could be $0.20 to $0.30 lower.

At this price, a Textron buyer is betting that management fixes a real problem in its jet factories, not that the market has overlooked a sound business. Twelve-month profit has grown, but jet deliveries fell in the latest quarter, and management’s goal for better deliveries is 2027. If you add Textron to your portfolio, you are accepting thin margins while that work goes on. Jet deliveries in Textron’s next quarterly report, expected in October 2026, are the number to watch.

How To Act On TXT?

Not necessarily on Textron alone, if your goal is long-term wealth. Wealth is built by owning the companies that keep outperforming, the leaders of their industries, wherever they are. Here are two companies from Textron’s own industry that have beaten it. Over the five years to October 2026, Lockheed Martin stock rose 115% and ATI stock rose 1012%, while Textron stock rose 11.1%.

Finding companies like these takes comparison across industries and sectors, and that is what the Trefis High Quality (HQ) Portfolio does. It holds 30 quality companies in equal weight and, since its inception in September 2020, has returned more than 105%, ahead of a benchmark that combines the S&P 500, S&P Mid-cap and Russell 2000. See how we find the leaders.

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