DCF Studio

    TXT · NYQ · Industrials

    Textron Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 62.27

    Market price

    USD 88.53

    Implied upside

    -29.7%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Value Per Share

    Perpetuity growth
    USD 62.27-29.7%
    Exit multiple
    USD 87.18-1.5%
    Market price
    USD 88.53

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0m364m727mFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 15.5bnUSD 16.4bnUSD 17.3bnUSD 18.1bnUSD 18.9bnUSD 19.7bnUSD 20.4bnUSD 21.1bnUSD 21.7bnUSD 22.2bn+4.1%
    EBITUSD 1.1bnUSD 1.1bnUSD 1.2bnUSD 1.2bnUSD 1.3bnUSD 1.4bnUSD 1.4bnUSD 1.5bnUSD 1.5bnUSD 1.5bn+4.1%
    NOPATUSD 908.7mUSD 959.8mUSD 1.0bnUSD 1.1bnUSD 1.1bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.3bnUSD 1.3bn+4.1%
    Add depreciation & amortisationUSD 445.8mUSD 470.8mUSD 495.4mUSD 519.4mUSD 542.5mUSD 564.5mUSD 585.2mUSD 604.4mUSD 621.9mUSD 637.5m+4.1%
    Less capital expenditureUSD -424.9mUSD -484.9mUSD -548.2mUSD -614.5mUSD -683.4mUSD -754.4mUSD -826.9mUSD -900.4mUSD -974.0mUSD -1.0bn+10.5%
    Capex, % of revenue2.7%3.0%3.2%3.4%3.6%3.8%4.1%4.3%4.5%4.7%-
    Less increase in working capitalUSD -233.4mUSD -272.7mUSD -268.0mUSD -261.0mUSD -251.6mUSD -239.8mUSD -225.6mUSD -209.0mUSD -190.2mUSD -169.3m-3.5%
    Free cashflow to firmUSD 696.1mUSD 673.0mUSD 689.2mUSD 702.7mUSD 713.4mUSD 721.2mUSD 725.8mUSD 727.3mUSD 725.5mUSD 720.4m+0.4%
    Discount factor0.96260.89190.82640.76560.70940.65730.60900.56430.52280.4844-
    Present valueUSD 670.1mUSD 600.2mUSD 569.5mUSD 538.0mUSD 506.1mUSD 474.0mUSD 442.0mUSD 410.4mUSD 379.3mUSD 349.0m-
    Present Value Of The ForecastUSD 4.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.920Reported 0.880, pulled toward 1.0 (Blume)
    Cost of equity8.78%Risk-free + beta x equity risk premium
    Cost of debt5.44%Risk-free + 55bp, the spread for a AA rating at 7.9x interest cover. Book interest / average debt was lower, at 3.4%.
    Market capitalisationUSD 15.0bn79.5% of capital
    Total debtUSD 3.9bn20.5% of capital, book value as a proxy
    Tax rate15.2%Effective, capped at statutory
    WACC7.93%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 62.27

    62% of EV

    Forecast FCFF, final year
    USD 720.4m
    Capex at depreciation, working capital in reinvestment
    USD 1.3bn
    Less reinvestment at g/ROIC (31.5% of NOPAT)
    USD -409.8m
    Capitalised
    USD 889.7m
    ROIC (WACC floor)
    7.9%
    Terminal value, undiscounted
    USD 16.8bn
    Terminal value, discounted
    USD 8.1bn
    Enterprise value
    USD 13.1bn
    Less net debt
    USD 1.9bn
    Equity value
    USD 11.2bn

    Exit at 12.0x EBITDA

    Value per shareUSD 87.18

    72% of EV

    Terminal value, undiscounted
    USD 26.1bn
    Terminal value, discounted
    USD 12.6bn
    Enterprise value
    USD 17.6bn
    Less net debt
    USD 1.9bn
    Equity value
    USD 15.7bn

    Spread between methods: 33%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.93%97.3698.2199.68102.09106.03
    6.93%76.8075.8074.8573.9673.17
    7.93%64.3263.2962.2761.2460.21
    8.93%55.1454.2853.4152.5551.69
    9.93%47.8747.1446.4045.6744.94

    Outlined: this model. Green text: above today's price of 88.53. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year4.8%4.2%9.5%
    EBIT margin7.7%6.9%9.1%
    Discount rate-7.9%6.3%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.