Textron (TXT) PT Raised to $90 at Jefferies After Guidance Implies 50% EPS Growth
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Jefferies analyst Sheila Kahyaoglu raised the price target on Textron (NYSE: TXT) to $90.00 (from $80.00) while maintaining a Buy rating, noting that business jets appear to be back after management raised 2021 guidance by 20c or 7% to $3.00-$3.20 after reporting a $0.31 beat in Q2 which implies 50% EPS growth.
The analyst stated "Aviation backlog of $2.7BB grew 94% y-o-y w/ implied orders up 145%. Assuming an avg jet price of $11MM the backlog supports 250 deliveries (vs. our est of 165 in 2021 and 195 in 2022 vs. recent peak of 206 in 2019). This is a healthy start to H1 with sustainability of the cycle taking some time to prove out." "We forecast 7% rev growth w/ segment earnings set to recover 48%, despite a 16% contraction at Bell. The path to $3.60 of EPS in 2022 appears reachable based on 6% top-line growth assuming an 18% increase in Cessna deliveries and segment EBIT of 11%. TXT is valued at 20X 2022 EPS of $3.60 or a 25% disct to peers, as such we raise our PT to $90."
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