Goldman Sachs Reiterates Buy Rating On TXT

Goldman Sachs is reiterating its Buy rating on Textron Inc. TXT based upon mixed results in 1Q. Says Goldman Sachs, in its report, “Textron's 1Q report reflected a softer-than-expected start at Cessna and delays at Systems. EPS of $0.10 was below GS/consensus of $0.15/$0.17, with Cessna driving the bulk of the profitability shortfall. Lower deposit forfeiture income, inflation, and higher R&D expense more than offset better mix at Cessna. Despite the slow start, however, biz jet order activity is improved and reflects broad-based geographic demand. Midsize cabin continue to fair better than light. Cessna book-to-bill of 0.48X was consistent with management commentary that backlog build will be a late 2011 event. Bell and Systems achieved a book-to-bill of more than 1.0, but while Bell is seeing negligible impact from the CR, it is possible that Systems awards slip to the right.” Goldman Sachs is also maintaining its price target of $31 on TXT. TXT closed yesterday at $25.51.