We find Textron to be slightly undervalued versus Lockheed Martin. Here are the factors we considered:
P/S Ratio
TXT's P/S multiple of 0.9x is
substantially lower than the figure of 1.5x for LMT
Revenue Growth
Over the last twelve months, Textron has seen revenues change by -9.9% -
much lower than the figure of 10.1% for Lockheed MartinIn the twelve-month period before that, revenues for Textron had changed by -6.3% -
meaningfully lower than the 9.7% change for Lockheed Martin
Operating Margin
Textron's operating margin was 3.7% for the most recent twelve-month period, which is
lower than Lockheed Martin's operating margin of 13.2%Over the last twelve months, the operating margin for Textron changed by -5.2 pp (percentage points) -
worse than the change of -0.9 pp for Lockheed MartinIn the twelve-month period before that, the operating margin for Textron had changed by -1.7 pp -
worse than the change of 0.2 pp for Lockheed Martin over the same period
Note: TXT reports its results on a fiscal year ending 0/12
Textron Lockheed Martin Valuation: Current Market Cap $11 Bil $97 Bil Current P/S Multiple 0.9x 1.5xTextron substantially lower Revenues: Total Revenue (LTM) $12 Bil $64 Bil LTM Revenue Growth (Current) -9.9% 10%Textron much lower LTM Revenue Growth (Year-ago) -6.3% 9.7%Textron meaningfully lower Operating Income/Margin: Operating Income (LTM) $444 Mil $8.5 Bil Operating Margin (LTM) 3.7% 13%Textron lower LTM Margin Change (Current) -5.2 pp -0.9 ppTextron worse LTM Margin Change (Year-ago) -1.7 pp 0.2 ppSimilar for both companies