Thursday, October 19

How Textron is Winning the Future of Aviation

Our aviation portfolio has been largely successful as we've developed it over the years, but currently, it relies a little too heavily on the biggest names in the sector (i.e. see United & Delta). If we're going to have long-term success, we need to make sure we have diversified mid-tier names in the sector as well. 

Which is why we're excited to initiate coverage in Textron Inc ($TXT), an aviation conglomerate that has been firing on all cylinders for the past year. 

In the mid-cap space, companies need as many paths to growth as possible. And Textron is a rare breed, as a lot of their holdings have had breakout years independent of each other. 

  • Textron is a small-jet kingpin that is flying high on a new resurgence of business travel demand.

  • Their brand of VTOL (vertical take-off and landing) is surging toward dominance as the Defense Department is finding new uses for the V-22 Osprey. More importantly, Textron is also the winner of a massive contract that will set them up to deliver a spiritual evolution of the Osprey to replace the Blackhawk Helicopter system that has been the workhorse for the U.S. military for decades. 

  • And on the growth end of things, Textron's eVTOL (electric vertical take-off and landing) business is gathering steam in a big way, generating a lot of incredible 5-year growth prospects as industry leaders continue to shape expectations around that new frontier. 

With EBITDA up across the board and a new contract with NetJets to deliver 1,500 Cessna Citation vehicles in place, Textron is setting itself up to be a cash flow powerhouse in an uncertain macro environment. 

So let's dive into what's lifting Textron stock this year and see just how far they can grow with better-managed costs and outputs. 👇

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