Citi Maintains 'Buy' Rating on Textron (TXT) - Drops Price Target

July 18, 2008 10:27 AM EDT

Citi maintains 'Buy' rating on Textron (NYSE: TXT); lowers price target from $69 to $59.

Citi analyst says, "Since mid June TXT has parlayed strong Cessna orders, 13% organic growth, Q2 EPS upside and an extraordinary backlog into a ~25% stock decline through poor communications and forecasting...Stock Too Cheap Given Visibility And Franchises – TXT today has $23.5 billion backlog and $11 billion market cap for a Price/Backlog ratio below 0.47x versus a historical median of 1.09X. Cessna and Bell are iconic franchises in aerospace. If management cannot find a way to unlock shareholder value, TXT could/should be sold to someone who can. Asset sales and large share repurchase should be an immediate priority...Cheap valuation should create either an internal or external catalyst for upside."

Textron Inc. is a multi-industry company that operates in 34 countries. The Company operates its business through four operating segments.

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