Textron Inc.

TXT

IndustrialsAerospace & DefenseNYSE

$90.82

Market Cap: $15.79B

Textron Inc. (TXT) Valuation Summary

Updated Apr 6, 2026 22:29

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$30.51 – $147.76	$54.00	-39.0%
Growth Exit 10Y	$32.49 – $144.35	$55.19	-37.7%
EBITDA Exit 5Y	$48.24 – $108.43	$75.83	-14.4%
EBITDA Exit 10Y	$46.60 – $112.30	$74.62	-15.7%
▸ Trading Multiples
P/E	$96.27 – $157.88	$107.42	+21.3%
EV/EBITDA	$101.82 – $167.84	$113.36	+28.0%
EV/Revenue	$140.91 – $270.04	$165.17	+86.5%
▸ PEG
PEG Fair Value	$51.68 – $51.68	$51.68	-41.6%
▸ Earnings Power Value
Earnings Power Value	$31.36 – $53.32	$40.14	-54.7%
▸ Dividend Discount
Dividend Discount	$1.28 – $2.87	$1.82	-97.9%

Valuation History

DCF Analysis

Fair Value

$54.00

Market Price

$90.82

Upside / Downside

-40.5%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Textron Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 4.6% to 2.8% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 24, DPO 33, DIO 128). At a 7.5% WACC with mid-year discounting, the terminal value (80% of enterprise value) is derived from the Gordon Growth Model on Year 6 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $54.00 per share, suggesting TXT is overvalued by 40.5% at the current price of $90.82.

FCFF Present Value Calculation

WACC

7.49%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	757	759	791	819	842	863
(−) Net Interest	121	121	126	131	135	138
(+) D&A	376	399	410	420	433	444
EBITDA	1,253	1,279	1,327	1,370	1,410	1,445

(−) Tax	115	115	120	125	128	131
(−) CapEx	431	433	451	467	480	492
(−) ΔWC	375	11	182	161	131	135
Free Cash Flow (FCFF)	332	719	574	617	670	687

Terminal Value						13,754
WACC / Discount Rate	7.5%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	320	645	479	479	484	9,583

Enterprise Value	11,990
Projection Period	2,407	20.1%
Terminal Value	9,583	79.9%

(−) Current Net Debt	2,257

Equity Value	9,733
(/) Outstanding Shares	180

Fair Price	$54.00

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
5.5%	$75	$85	$99	$118	$148
6.5%	$57	$63	$71	$81	$94
7.5%	$45	$49	$54	$60	$67
8.5%	$37	$40	$43	$47	$51
9.5%	$31	$33	$35	$38	$41

Current price: $90.82. Green = undervalued, Red = overvalued.

Fair Value

$55.19

Market Price

$90.82

Upside / Downside

-39.2%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Textron Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 4.6% to 3.3% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 24, DPO 33, DIO 128). At a 7.5% WACC with mid-year discounting, the terminal value (63% of enterprise value) is derived from the Gordon Growth Model on Year 11 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $55.19 per share, suggesting TXT is overvalued by 39.2% at the current price of $90.82.

FCFF Present Value Calculation

WACC

7.49%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	757	759	791	819	842	871	906	940	973	1,005	1,030
(−) Net Interest	121	121	126	131	135	139	145	150	155	160	165
(+) D&A	376	399	410	420	433	452	465	482	499	517	530
EBITDA	1,253	1,279	1,327	1,370	1,410	1,462	1,516	1,572	1,628	1,682	1,724

(−) Tax	115	115	120	125	128	133	138	143	148	153	157
(−) CapEx	431	433	451	467	480	497	517	536	555	573	587
(−) ΔWC	375	11	182	161	131	161	199	194	188	180	184
Free Cash Flow (FCFF)	332	719	574	617	670	672	662	699	737	776	796

Terminal Value											15,934
WACC / Discount Rate	7.5%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	320	645	479	479	484	452	414	407	399	391	7,736

Enterprise Value	12,205
Projection Period	4,469	36.6%
Terminal Value	7,736	63.4%

(−) Current Net Debt	2,257

Equity Value	9,948
(/) Outstanding Shares	180

Fair Price	$55.19

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
5.5%	$79	$89	$101	$118	$144
6.5%	$61	$66	$72	$81	$92
7.5%	$48	$51	$55	$60	$66
8.5%	$39	$41	$44	$47	$50
9.5%	$32	$34	$36	$38	$40

Current price: $90.82. Green = undervalued, Red = overvalued.

Fair Value

$75.86

Market Price

$90.82

Upside / Downside

-16.5%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Textron Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 4.6% to 2.8% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 24, DPO 33, DIO 128). At a 7.5% WACC with mid-year discounting, the terminal value (85% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.4x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $75.83 per share, suggesting TXT is overvalued by 16.5% at the current price of $90.82.

FCFF Present Value Calculation

WACC

7.49%

3% – 20%

EV/EBITDA Exit Multiple

13.43x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	757	759	791	819	842	863
(−) Net Interest	121	121	126	131	135	138
(+) D&A	376	399	410	420	433	444
EBITDA	1,253	1,279	1,327	1,370	1,410	1,445

(−) Tax	115	115	120	125	128	—
(−) CapEx	431	433	451	467	480	—
(−) ΔWC	375	11	182	161	131	—
Free Cash Flow (FCF)	332	719	574	617	670	—

Peers' EBITDA Multiple						13.4x
Terminal Value						19,410
WACC / Discount Rate	7.49%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	320	645	479	479	484	13,524

Enterprise Value	15,931
Projection Period	2,407	15.1%
Terminal Value	13,524	84.9%

(−) Current Net Debt	2,257
Equity Value	13,674
(÷) Outstanding Shares	180M
Fair Price	$76	-16.5%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	9.4x	11.4x	13.4x	15.4x	17.4x
5.5%	$59	$72	$84	$96	$108
6.5%	$56	$68	$80	$91	$103
7.5%	$53	$65	$76	$87	$98
8.5%	$51	$61	$72	$83	$93
9.5%	$48	$58	$69	$79	$89

Current price: $90.82. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$74.64

Market Price

$90.82

Upside / Downside

-17.8%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Textron Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 4.6% to 3.3% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 24, DPO 33, DIO 128). At a 7.5% WACC with mid-year discounting, the terminal value (72% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.4x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $74.62 per share, suggesting TXT is overvalued by 17.8% at the current price of $90.82.

FCFF Present Value Calculation

WACC

7.49%

3% – 20%

EV/EBITDA Exit Multiple

13.43x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	757	759	791	819	842	871	906	940	973	1,005	1,030
(−) Net Interest	121	121	126	131	135	139	145	150	155	160	165
(+) D&A	376	399	410	420	433	452	465	482	499	517	530
EBITDA	1,253	1,279	1,327	1,370	1,410	1,462	1,516	1,572	1,628	1,682	1,724

(−) Tax	115	115	120	125	128	133	138	143	148	153	—
(−) CapEx	431	433	451	467	480	497	517	536	555	573	—
(−) ΔWC	375	11	182	161	131	161	199	194	188	180	—
Free Cash Flow (FCF)	332	719	574	617	670	672	662	699	737	776	—

Peers' EBITDA Multiple											13.4x
Terminal Value											23,158
WACC / Discount Rate	7.49%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	320	645	479	479	484	452	414	407	399	391	11,242

Enterprise Value	15,712
Projection Period	4,469	28.4%
Terminal Value	11,242	71.6%

(−) Current Net Debt	2,257
Equity Value	13,455
(÷) Outstanding Shares	180M
Fair Price	$75	-17.8%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	9.4x	11.4x	13.4x	15.4x	17.4x
5.5%	$67	$79	$90	$101	$112
6.5%	$61	$72	$82	$92	$102
7.5%	$56	$65	$75	$84	$93
8.5%	$51	$60	$68	$76	$85
9.5%	$47	$54	$62	$70	$77

Current price: $90.82. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$107.71

Market Price

$90.82

Upside / Downside

+18.6%

Verdict

Undervalued

Using the industry peer median P/E Multiples multiple (trailing + forward), Textron Inc. (TXT) has a fair value of $107.71 based on 8 comparable companies in the Aerospace & Defense industry.

P/E Valuation — Aerospace & Defense

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
Textron Inc.TXT	16,371	17.8x	14.0x
Woodward, Inc.WWD	22,732	52.7x	56.7x
Huntington Ingalls Industries, Inc.HII	15,998	26.5x	23.6x
Watsco, Inc.WSO	15,389	30.9x	30.1x
LATAM Airlines Group S.A.LTM	14,081	9.6x	16.2x
Carlisle Companies IncorporatedCSL	13,555	19.4x	16.4x
Avery Dennison CorporationAVY	13,019	19.3x	18.0x
Masco CorporationMAS	12,153	15.5x	15.2x
Allegion plcALLE	12,076	18.8x	17.1x
Industry Median		19.3x	17.5x
(*) Profit after tax		921	1,170
Equity Value		17,800	21,032
(/) Outstanding shares		180	180
Fair Price		$99	$117

Selected Fair Value (avg of trailing + forward)

$107.71

+18.6%

Fair Value

$113.48

Market Price

$90.82

Upside / Downside

+24.9%

Verdict

Undervalued

Using the industry peer median EV/EBITDA multiple (trailing + forward), Textron Inc. (TXT) has a fair value of $113.48 based on 8 comparable companies in the Aerospace & Defense industry.

EV/EBITDA Valuation — Aerospace & Defense

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
Textron Inc.TXT	16,371	11.3x	10.8x
Woodward, Inc.WWD	22,732	34.0x	34.5x
Huntington Ingalls Industries, Inc.HII	15,998	15.2x	14.7x
Watsco, Inc.WSO	15,389	19.8x	19.4x
LATAM Airlines Group S.A.LTM	14,081	6.1x	6.7x
Carlisle Companies IncorporatedCSL	13,555	12.5x	12.5x
Avery Dennison CorporationAVY	13,019	12.7x	12.8x
Masco CorporationMAS	12,153	10.8x	10.8x
Allegion plcALLE	12,076	14.2x	14.1x
Industry Median		13.4x	13.5x
(*) EBITDA		1,646	1,729
= Enterprise Value		22,098	23,326
(-) Net Debt		2,257	2,257
Equity Value		19,841	21,069
(/) Outstanding shares		180	180
Fair Price		$110	$117

Selected Fair Value (avg of trailing + forward)

$113.48

+24.9%

Fair Value

$165.34

Market Price

$90.82

Upside / Downside

+82.0%

Verdict

Undervalued

Using the industry peer median EV/Revenue multiple (trailing + forward), Textron Inc. (TXT) has a fair value of $165.34 based on 9 comparable companies in the Aerospace & Defense industry.

EV/Revenue Valuation — Aerospace & Defense

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Textron Inc.TXT	16,371	1.3x	1.2x
Woodward, Inc.WWD	22,732	6.5x	6.6x
Huntington Ingalls Industries, Inc.HII	15,998	1.5x	1.4x
Watsco, Inc.WSO	15,389	2.1x	2.1x
LATAM Airlines Group S.A.LTM	14,081	1.4x	1.5x
Kratos Defense & Security Solutions, Inc.KTOS	13,837	10.0x	8.1x
Carlisle Companies IncorporatedCSL	13,555	3.1x	3.0x
Avery Dennison CorporationAVY	13,019	1.9x	1.9x
Masco CorporationMAS	12,153	2.0x	2.0x
Allegion plcALLE	12,076	3.4x	3.4x
Industry Median		2.1x	2.1x
(*) Revenue		14,799	15,543
= Enterprise Value		31,552	32,568
(-) Net Debt		2,257	2,257
Equity Value		29,295	30,311
(/) Outstanding shares		180	180
Fair Price		$163	$168

Selected Fair Value (avg of trailing + forward)

$165.34

+82.0%

PEG Fair Value

Fair Value

$51.68

Market Price

$90.82

Upside / Downside

-43.1%

Verdict

Overvalued

Using the PEG framework with analyst consensus forward EPS growth of 8.0% plus 0.1% dividend yield, the company has a fair value of $51.68 based on NTM EPS (FY2027) of $6.46. The current PEG ratio is 2.07.

PEG Ratio

2.07Expensive

01.02.03.0+

PEG = P/E ÷ (Growth + Yield) = 13.7 ÷ (6.5% + 0.1%) = 2.07

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: Slow GrowerPEG less reliable

PEG tends to undervalue slow growers — consider dividend yield and asset value instead.

Fair Value Calculation

EPS Growth RateForward	6.5%
Dividend Yield	+0.1%
Adjusted Growth (clamped 8–25%)Clamped	8.0%
Fair P/E	8.0x
NTM EPS (FY2027)	$6.46
Fair Value	$51.68

Growth Analysis

Forward GrowthActive

Period	EPS Est.	Growth	Analysts
FY2025 (actual)	$5.11	—	—
FY2027E	$6.46	+26.4%	11
FY2028E	$7.31	+13.2%	11
FY2029E	$8.13	+11.2%	11
FY2030E	$8.23	+1.2%	10
FY2031E	$7.45	-9.4%	4

6Y Forward EPS CAGR: 6.5%

Historical Growth

Year	Net Income	EPS	YoY
FY2021	$746.0M	$3.30	—
FY2022	$861.0M	$4.01	+21.5%
FY2023	$921.0M	$4.56	+13.7%
FY2024	$824.0M	$4.33	-5.0%
FY2025	$921.0M	$5.11	+18.0%

4Y Historical EPS CAGR: 11.6%

Earnings Power Value

Fair Value

$40.14

Market Price

$90.82

Upside / Downside

-55.8%

Verdict

Overvalued

Using the Earnings Power Value framework with a WACC of 7.5% and normalized earnings of $711.4M, the company has a fair value of $40.14 per share. The EPV range is $31.36 – $53.32 based on WACC sensitivity (6.0% – 9.0%).

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	711	711	711
(/) WACC	9.0%	7.5%	6.0%
Enterprise Value	7,910	9,493	11,869
(-) Net debt	2,257	2,257	2,257
Equity Value	5,653	7,236	9,612
(/) Outstanding shares	180	180	180
Fair Price	$31.36	$40.14	$53.32

Dividend Discount Model

Fair Value

$1.82

Market Price

$90.82

Upside / Downside

-98.0%

Verdict

Overvalued

Using the Two-Stage Dividend Discount Model with a Cost of Equity of 9.1% and projected dividend growth of 4.9%, the fair value is $1.82 per share. The DDM range is $1.28 – $2.87 based on sensitivity analysis across Cost of Equity and growth rate assumptions.

Dividend Profile

Current DPS

$0.11

Dividend Yield

0.12%

Payout Ratio

2.1%

Dividend Coverage

48.47x

FCF Payout Ratio2.1%

DPS CAGR (4Y)6.2%

Historical Dividends Per Share

Year	DPS	Payout Ratio	YoY Growth
2025	$0.11	2.1%	+25.4%
2024	$0.08	1.9%	+6.0%
2023	$0.08	1.7%	-5.3%
2022	$0.08	2.1%	+0.9%
2021	$0.08	2.4%	—

Dividend Projections (5-Year)

Year	Projected DPS	Growth	Discount Factor	Present Value
2026	$0.11	4.9%	0.9169	$0.10
2027	$0.12	4.9%	0.8407	$0.10
2028	$0.12	4.9%	0.7708	$0.09
2029	$0.13	4.9%	0.7068	$0.09
2030	$0.13	4.9%	0.6480	$0.09
Terminal Value	$0.14 DPS	2.5%		$1.35

PV of Projected Dividends$0.47

PV of Terminal Value$1.35

Fair Value per Share$1.82

Sensitivity Analysis

Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.

Ke \ Growth	2.9%	3.9%	4.9%	5.9%	6.9%
7.1%	$2	$3	$3	$3	$3
8.1%	$2	$2	$2	$2	$2
9.1%	$2	$2	$2	$2	$2
10.1%	$1	$2	$2	$2	$2
11.1%	$1	$1	$1	$1	$2

Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.

Textron Inc. (TXT) Valuation Summary

Updated Apr 6, 2026 22:29

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$30.51 – $147.76	$54.00	-39.0%
Growth Exit 10Y	$32.49 – $144.35	$55.19	-37.7%
EBITDA Exit 5Y	$48.24 – $108.43	$75.83	-14.4%
EBITDA Exit 10Y	$46.60 – $112.30	$74.62	-15.7%
▸ Trading Multiples
P/E	$96.27 – $157.88	$107.42	+21.3%
EV/EBITDA	$101.82 – $167.84	$113.36	+28.0%
EV/Revenue	$140.91 – $270.04	$165.17	+86.5%
▸ PEG
PEG Fair Value	$51.68 – $51.68	$51.68	-41.6%
▸ Earnings Power Value
Earnings Power Value	$31.36 – $53.32	$40.14	-54.7%
▸ Dividend Discount
Dividend Discount	$1.28 – $2.87	$1.82	-97.9%

Valuation History

DCF Analysis

Fair Value

$54.00

Market Price

$90.82

Upside / Downside

-40.5%

Verdict

Overvalued

FCFF Present Value Calculation

WACC

7.49%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	757	759	791	819	842	863
(−) Net Interest	121	121	126	131	135	138
(+) D&A	376	399	410	420	433	444
EBITDA	1,253	1,279	1,327	1,370	1,410	1,445

(−) Tax	115	115	120	125	128	131
(−) CapEx	431	433	451	467	480	492
(−) ΔWC	375	11	182	161	131	135
Free Cash Flow (FCFF)	332	719	574	617	670	687

Terminal Value						13,754
WACC / Discount Rate	7.5%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	320	645	479	479	484	9,583

Enterprise Value	11,990
Projection Period	2,407	20.1%
Terminal Value	9,583	79.9%

(−) Current Net Debt	2,257

Equity Value	9,733
(/) Outstanding Shares	180

Fair Price	$54.00

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
5.5%	$75	$85	$99	$118	$148
6.5%	$57	$63	$71	$81	$94
7.5%	$45	$49	$54	$60	$67
8.5%	$37	$40	$43	$47	$51
9.5%	$31	$33	$35	$38	$41

Current price: $90.82. Green = undervalued, Red = overvalued.

Fair Value

$55.19

Market Price

$90.82

Upside / Downside

-39.2%

Verdict

Overvalued

FCFF Present Value Calculation

WACC

7.49%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	757	759	791	819	842	871	906	940	973	1,005	1,030
(−) Net Interest	121	121	126	131	135	139	145	150	155	160	165
(+) D&A	376	399	410	420	433	452	465	482	499	517	530
EBITDA	1,253	1,279	1,327	1,370	1,410	1,462	1,516	1,572	1,628	1,682	1,724

(−) Tax	115	115	120	125	128	133	138	143	148	153	157
(−) CapEx	431	433	451	467	480	497	517	536	555	573	587
(−) ΔWC	375	11	182	161	131	161	199	194	188	180	184
Free Cash Flow (FCFF)	332	719	574	617	670	672	662	699	737	776	796

Terminal Value											15,934
WACC / Discount Rate	7.5%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	320	645	479	479	484	452	414	407	399	391	7,736

Enterprise Value	12,205
Projection Period	4,469	36.6%
Terminal Value	7,736	63.4%

(−) Current Net Debt	2,257

Equity Value	9,948
(/) Outstanding Shares	180

Fair Price	$55.19

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
5.5%	$79	$89	$101	$118	$144
6.5%	$61	$66	$72	$81	$92
7.5%	$48	$51	$55	$60	$66
8.5%	$39	$41	$44	$47	$50
9.5%	$32	$34	$36	$38	$40

Current price: $90.82. Green = undervalued, Red = overvalued.

Fair Value

$75.86

Market Price

$90.82

Upside / Downside

-16.5%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Textron Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 4.6% to 2.8% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 24, DPO 33, DIO 128). At a 7.5% WACC with mid-year discounting, the terminal value (85% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.4x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $75.83 per share, suggesting TXT is overvalued by 16.5% at the current price of $90.82.

FCFF Present Value Calculation

WACC

7.49%

3% – 20%

EV/EBITDA Exit Multiple

13.43x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	757	759	791	819	842	863
(−) Net Interest	121	121	126	131	135	138
(+) D&A	376	399	410	420	433	444
EBITDA	1,253	1,279	1,327	1,370	1,410	1,445

(−) Tax	115	115	120	125	128	—
(−) CapEx	431	433	451	467	480	—
(−) ΔWC	375	11	182	161	131	—
Free Cash Flow (FCF)	332	719	574	617	670	—

Peers' EBITDA Multiple						13.4x
Terminal Value						19,410
WACC / Discount Rate	7.49%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	320	645	479	479	484	13,524

Enterprise Value	15,931
Projection Period	2,407	15.1%
Terminal Value	13,524	84.9%

(−) Current Net Debt	2,257
Equity Value	13,674
(÷) Outstanding Shares	180M
Fair Price	$76	-16.5%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	9.4x	11.4x	13.4x	15.4x	17.4x
5.5%	$59	$72	$84	$96	$108
6.5%	$56	$68	$80	$91	$103
7.5%	$53	$65	$76	$87	$98
8.5%	$51	$61	$72	$83	$93
9.5%	$48	$58	$69	$79	$89

Current price: $90.82. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$74.64

Market Price

$90.82

Upside / Downside

-17.8%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Textron Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 4.6% to 3.3% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 24, DPO 33, DIO 128). At a 7.5% WACC with mid-year discounting, the terminal value (72% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.4x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $74.62 per share, suggesting TXT is overvalued by 17.8% at the current price of $90.82.

FCFF Present Value Calculation

WACC

7.49%

3% – 20%

EV/EBITDA Exit Multiple

13.43x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	757	759	791	819	842	871	906	940	973	1,005	1,030
(−) Net Interest	121	121	126	131	135	139	145	150	155	160	165
(+) D&A	376	399	410	420	433	452	465	482	499	517	530
EBITDA	1,253	1,279	1,327	1,370	1,410	1,462	1,516	1,572	1,628	1,682	1,724

(−) Tax	115	115	120	125	128	133	138	143	148	153	—
(−) CapEx	431	433	451	467	480	497	517	536	555	573	—
(−) ΔWC	375	11	182	161	131	161	199	194	188	180	—
Free Cash Flow (FCF)	332	719	574	617	670	672	662	699	737	776	—

Peers' EBITDA Multiple											13.4x
Terminal Value											23,158
WACC / Discount Rate	7.49%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	320	645	479	479	484	452	414	407	399	391	11,242

Enterprise Value	15,712
Projection Period	4,469	28.4%
Terminal Value	11,242	71.6%

(−) Current Net Debt	2,257
Equity Value	13,455
(÷) Outstanding Shares	180M
Fair Price	$75	-17.8%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	9.4x	11.4x	13.4x	15.4x	17.4x
5.5%	$67	$79	$90	$101	$112
6.5%	$61	$72	$82	$92	$102
7.5%	$56	$65	$75	$84	$93
8.5%	$51	$60	$68	$76	$85
9.5%	$47	$54	$62	$70	$77

Current price: $90.82. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$107.71

Market Price

$90.82

Upside / Downside

+18.6%

Verdict

Undervalued

Using the industry peer median P/E Multiples multiple (trailing + forward), Textron Inc. (TXT) has a fair value of $107.71 based on 8 comparable companies in the Aerospace & Defense industry.

P/E Valuation — Aerospace & Defense

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
Textron Inc.TXT	16,371	17.8x	14.0x
Woodward, Inc.WWD	22,732	52.7x	56.7x
Huntington Ingalls Industries, Inc.HII	15,998	26.5x	23.6x
Watsco, Inc.WSO	15,389	30.9x	30.1x
LATAM Airlines Group S.A.LTM	14,081	9.6x	16.2x
Carlisle Companies IncorporatedCSL	13,555	19.4x	16.4x
Avery Dennison CorporationAVY	13,019	19.3x	18.0x
Masco CorporationMAS	12,153	15.5x	15.2x
Allegion plcALLE	12,076	18.8x	17.1x
Industry Median		19.3x	17.5x
(*) Profit after tax		921	1,170
Equity Value		17,800	21,032
(/) Outstanding shares		180	180
Fair Price		$99	$117

Selected Fair Value (avg of trailing + forward)

$107.71

+18.6%

Fair Value

$113.48

Market Price

$90.82

Upside / Downside

+24.9%

Verdict

Undervalued

Using the industry peer median EV/EBITDA multiple (trailing + forward), Textron Inc. (TXT) has a fair value of $113.48 based on 8 comparable companies in the Aerospace & Defense industry.

EV/EBITDA Valuation — Aerospace & Defense

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
Textron Inc.TXT	16,371	11.3x	10.8x
Woodward, Inc.WWD	22,732	34.0x	34.5x
Huntington Ingalls Industries, Inc.HII	15,998	15.2x	14.7x
Watsco, Inc.WSO	15,389	19.8x	19.4x
LATAM Airlines Group S.A.LTM	14,081	6.1x	6.7x
Carlisle Companies IncorporatedCSL	13,555	12.5x	12.5x
Avery Dennison CorporationAVY	13,019	12.7x	12.8x
Masco CorporationMAS	12,153	10.8x	10.8x
Allegion plcALLE	12,076	14.2x	14.1x
Industry Median		13.4x	13.5x
(*) EBITDA		1,646	1,729
= Enterprise Value		22,098	23,326
(-) Net Debt		2,257	2,257
Equity Value		19,841	21,069
(/) Outstanding shares		180	180
Fair Price		$110	$117

Selected Fair Value (avg of trailing + forward)

$113.48

+24.9%

Fair Value

$165.34

Market Price

$90.82

Upside / Downside

+82.0%

Verdict

Undervalued

Using the industry peer median EV/Revenue multiple (trailing + forward), Textron Inc. (TXT) has a fair value of $165.34 based on 9 comparable companies in the Aerospace & Defense industry.

EV/Revenue Valuation — Aerospace & Defense

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Textron Inc.TXT	16,371	1.3x	1.2x
Woodward, Inc.WWD	22,732	6.5x	6.6x
Huntington Ingalls Industries, Inc.HII	15,998	1.5x	1.4x
Watsco, Inc.WSO	15,389	2.1x	2.1x
LATAM Airlines Group S.A.LTM	14,081	1.4x	1.5x
Kratos Defense & Security Solutions, Inc.KTOS	13,837	10.0x	8.1x
Carlisle Companies IncorporatedCSL	13,555	3.1x	3.0x
Avery Dennison CorporationAVY	13,019	1.9x	1.9x
Masco CorporationMAS	12,153	2.0x	2.0x
Allegion plcALLE	12,076	3.4x	3.4x
Industry Median		2.1x	2.1x
(*) Revenue		14,799	15,543
= Enterprise Value		31,552	32,568
(-) Net Debt		2,257	2,257
Equity Value		29,295	30,311
(/) Outstanding shares		180	180
Fair Price		$163	$168

Selected Fair Value (avg of trailing + forward)

$165.34

+82.0%

PEG Fair Value

Fair Value

$51.68

Market Price

$90.82

Upside / Downside

-43.1%

Verdict

Overvalued

PEG Ratio

2.07Expensive

01.02.03.0+

PEG = P/E ÷ (Growth + Yield) = 13.7 ÷ (6.5% + 0.1%) = 2.07

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: Slow GrowerPEG less reliable

PEG tends to undervalue slow growers — consider dividend yield and asset value instead.

Fair Value Calculation

EPS Growth RateForward	6.5%
Dividend Yield	+0.1%
Adjusted Growth (clamped 8–25%)Clamped	8.0%
Fair P/E	8.0x
NTM EPS (FY2027)	$6.46
Fair Value	$51.68

Growth Analysis

Forward GrowthActive

Period	EPS Est.	Growth	Analysts
FY2025 (actual)	$5.11	—	—
FY2027E	$6.46	+26.4%	11
FY2028E	$7.31	+13.2%	11
FY2029E	$8.13	+11.2%	11
FY2030E	$8.23	+1.2%	10
FY2031E	$7.45	-9.4%	4

6Y Forward EPS CAGR: 6.5%

Historical Growth

Year	Net Income	EPS	YoY
FY2021	$746.0M	$3.30	—
FY2022	$861.0M	$4.01	+21.5%
FY2023	$921.0M	$4.56	+13.7%
FY2024	$824.0M	$4.33	-5.0%
FY2025	$921.0M	$5.11	+18.0%

4Y Historical EPS CAGR: 11.6%

Earnings Power Value

Fair Value

$40.14

Market Price

$90.82

Upside / Downside

-55.8%

Verdict

Overvalued

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	711	711	711
(/) WACC	9.0%	7.5%	6.0%
Enterprise Value	7,910	9,493	11,869
(-) Net debt	2,257	2,257	2,257
Equity Value	5,653	7,236	9,612
(/) Outstanding shares	180	180	180
Fair Price	$31.36	$40.14	$53.32

Dividend Discount Model

Fair Value

$1.82

Market Price

$90.82

Upside / Downside

-98.0%

Verdict

Overvalued

Dividend Profile

Current DPS

$0.11

Dividend Yield

0.12%

Payout Ratio

2.1%

Dividend Coverage

48.47x

FCF Payout Ratio2.1%

DPS CAGR (4Y)6.2%

Historical Dividends Per Share

Year	DPS	Payout Ratio	YoY Growth
2025	$0.11	2.1%	+25.4%
2024	$0.08	1.9%	+6.0%
2023	$0.08	1.7%	-5.3%
2022	$0.08	2.1%	+0.9%
2021	$0.08	2.4%	—

Dividend Projections (5-Year)

Year	Projected DPS	Growth	Discount Factor	Present Value
2026	$0.11	4.9%	0.9169	$0.10
2027	$0.12	4.9%	0.8407	$0.10
2028	$0.12	4.9%	0.7708	$0.09
2029	$0.13	4.9%	0.7068	$0.09
2030	$0.13	4.9%	0.6480	$0.09
Terminal Value	$0.14 DPS	2.5%		$1.35

PV of Projected Dividends$0.47

PV of Terminal Value$1.35

Fair Value per Share$1.82

Sensitivity Analysis

Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.

Ke \ Growth	2.9%	3.9%	4.9%	5.9%	6.9%
7.1%	$2	$3	$3	$3	$3
8.1%	$2	$2	$2	$2	$2
9.1%	$2	$2	$2	$2	$2
10.1%	$1	$2	$2	$2	$2
11.1%	$1	$1	$1	$1	$2