Textron surges on earnings beat, strong 2026 guidance
Q4 adjusted EPS of $1.73 topped estimates, while 2026 outlook calls for adjusted EPS of $6.40-$6.60
Textron shares climbed in early trading Wednesday after the aerospace and defense conglomerate reported fourth-quarter results that comfortably exceeded analyst expectations and issued confident guidance for 2026.
The Providence, Rhode Island-based manufacturer posted adjusted earnings per share of $1.73 for the final quarter of 2025, surpassing analyst estimates of $1.46 and representing a significant improvement from the $1.34 reported in the same period of 2024. Revenue jumped 16% year-over-year to reach $4.2 billion, well above the $3.71 billion consensus estimate.
Full-year 2025 revenue reached $14.8 billion, an 8% increase over the previous year, while segment profit grew 14% to $1.4 billion. The strong performance was driven primarily by Textron Aviation and Bell, the company's two largest business units, with aviation revenue up 36% and Bell military programs growing 20% for the second consecutive year.
Looking ahead, Textron provided robust 2026 guidance, projecting adjusted earnings per share of $6.40 to $6.60. The company also estimates manufacturing cash flow before pension contributions will range between $1.3 billion and $1.4 billion for the full year.
The results prompted multiple analysts to raise their price targets in January. Jefferies increased its target to $115 from $95, Susquehanna lifted its target to $110 from $95, and UBS raised its outlook to $99 from $89. The consensus among analysts now stands at roughly $97.90, suggesting modest upside from Tuesday's closing price of $94.31.
"Aviation completed three certification programs while significantly growing revenue as it recovered from the strike in 2024," said Lisa M. Atherton, Textron's chief executive officer, in the company's earnings announcement.
The Bell segment has been particularly strong, with revenue surging 35% year-over-year in the first quarter of 2025 to $983 million, driven by the U.S. Army's Future Long Range Assault Aircraft (FLRAA) program and military sustainment activities. By the third quarter, Bell's backlog had grown to $8.2 billion after adding $1.3 billion from the MV-75 program.
Textron returned substantial capital to shareholders during fiscal 2025, conducting share buybacks totaling $822 million. The company's balance sheet remains healthy, with a market capitalization of $16.9 billion and shares trading at approximately 20.7 times trailing earnings.
The stock has shown resilience in recent months, bouncing from a 52-week low of $57.66 to trade near $94, reflecting growing investor confidence in the company's diverse portfolio spanning business jets, helicopters, defense systems, and specialized vehicles. Textron's brands include Cessna, Beechcraft, Hawker, and Bell Textron.
Key risks to monitor include potential free cash flow pressure from increased capital expenditure on the MV-75 program and broader economic factors that could impact business jet demand. However, with strong order backlogs across segments and ongoing military modernization spending supporting Bell's growth trajectory, analysts remain largely positive on the company's prospects.
Textron will host a conference call today at 8:00 a.m. Eastern Time to discuss the quarterly results and 2026 outlook in greater detail.