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Stock Analyst Update

Consistency Makes Textron Attractive

Focus on efficiency and acquisitions bode well for cash-flow growth.


Textron’s (TXT) stock has been beaten up over the past year despite the company's solid and consistent performance, including Thursday's announcement of its 43rd consecutive quarter of earnings growth. Its shares' 30% slide during the past year provides patient investors an opportunity to buy into this good long-term holding.

The aerospace and commercial manufacturer reported strong improvement in efficiency during the second quarter, with the operating margin rising by 1.1 percentage points to 11.5% as a result of the continuing implementation of its Textron Quality Management initiative across all four lines of business. Margin improvement was strongest in the aircraft and automotive businesses. The focus on efficiency helped operating income to grow by 24%, twice the rate of revenue growth.

Richard Wilson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.