On Tuesday, Textron Inc . (NYSE:TXT) received an optimistic update from Jefferies, as the firm raised its price target on the stock to $105 from $100, while reiterating a Buy rating. The adjustment reflects positive developments highlighted in Textron's annual 10-K report.
The report outlined several key factors contributing to Textron's performance. A notable 1.7% net price increase was a significant tailwind for the company, particularly within its Aviation segment, which saw a 3.0 percentage point lift. Additionally, research and development expenses across Textron decreased by $31 million in 2023, with a reduction of $84 million at Bell. The company anticipates a further $20 million decline in R&D spending in 2024.
Textron's Systems segment experienced a 5% growth, bolstered by contributions from weapons sales. The Industrial segment also reported an 11% increase in sales, driven by a combination of a 3 percentage point increase from pricing and an 8 percentage point rise from volumes. Kautex, a part of Textron's Industrial segment, grew by 10%, with specialty vehicles (SV) climbing by 11%.
The geographical distribution of sales remained consistent, with the United States accounting for 68% of total sales, the same proportion as in 2022. This stability was attributed to higher domestic Aviation sales, which balanced out the performance at Bell.
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