Textron (TXT) PT Raised to $75 at Jefferies on Business Jet Backlog

Jefferies analyst Sheila Kahyaoglu raised the price target on Textron (NYSE: TXT) to $75.00 (from $70.00) after management raised 2021 guidance by 10c to $2.80-$3.00 following a $0.35 beat in Q1. The new guidance implies 40% EPS growth. The pace of recovery supports a return to EPS of $4.15 in 2023, or a 26% CAGR from the bottom in 2020. Despite the strong results, TXT is valued at 15.2X 2023 EPS which is a 28% discount to peers.

The analyst reiterated a Buy rating, stating "Backlog of $2.1BB grew 44% y-o-y w/ implied orders up 127%. Assuming an avg jet price of $11MM the backlog supports 185 deliveries (vs. our est of 165 in 2021 and 190 in 2022 vs. recent peak of 206 in 2019). This is a healthy start for the year but given startstops in prior jet cycles there is some caution until a stronger trend line is established."

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