Textron Trading at All Time High

Textron Inc. (TXT)

Investors are seeing the value of Textron shares rise up towards all time highs. The previous all time high of $74.4 from back in December of 2007 were just recently passed this last week.

On Thursday October 28th, Textron announced their Q3 earnings report to be at .85 per share as compared to their estimate of .78. Bringing in a total of 2.99B for the quarter in total revenue.

With a 2.9% gain in share price after the announcement of the earning report keeping prices on path towards new levels. With a strong buy reports from the Street showing that it has a target price of about $85 a share right now. Leaving about 17% of potential growth from the current price. EPS for the year was recently adjusted from $3.20 to $3.30. Operations cashflow is set to increase up above $1 Billion for the Fiscal year of 2021.

Profit Margins

When we look at Q2 for 2021 we see that although total revenue was $3.19B net income was $183 Million. For Q3 in 2021 total revenue was at $2.99B yet a total of $185 million was brought in for net income. This quarter is showing to have their best profit margins for the year. The first quarter was sitting at 5.94% and the second at 5. 77%. The third quarter finished off with a 6.19 % profit margin.

As the year starts to end off many aircraft transaction begin to close and manufactures begin to also see an uptick in new orders.

Modern and Efficient

This year Textron launched new variations of Citation Jet Models. The Citation M2 Gen2 will begin delivery in the first quarter of 2022. The Citation XLS Gen 2 will begin delivery in the second quarter of 2022. They are currently accepting orders for both models with production being lead from Wichita, Kansas.

The continuous development of new technology geared towards the customers desires has shown to be the leading factor as to why the Textron product’s are so well valued by their clients.

Technical Analysis

From the drop in price which occurred at the start March in 2020. A base in price starts to form as price tests the range between $20-$25 between March and May. The overall trend since the double bottom was formed has been positive overall. With over a 260% increase over a time period of about 2 years we are seeing price levels which are pushing towards new all time highs for the stock.

It is currently trading in a range bound movement with an upward progressions. The solid red line is acting as the current resistance levels as the grey zone holds as the support. When looking at the Fibonacci Channel the grey line is the top of the primary range zone. So it is now trading is the extensions that go beyond the standard range.

From a technicians perspective seeing how price respects this current price level in these next few weeks will help to determine how the continuation of the growth will be. With implied volatility starting to pick up there is more fluctuations in the price as we reach these new levels.

As the positive earnings report finished up the the week with some bullish candles on the chart, it could potentially signal an uptick in price. The next major price level of interest would be the $75 strike price. This would be the level which was unbreakable back in 2007. This would also fall in line with quarter theory trading methods.

Quarter Theory is based on numerology principals that the quarters of a whole hold significance. For example 1 Whole, is then broken up into four parts. Which if segmented out would be 1, .75, .50, and .25. If $100 per share is the whole value in reference then $75 would be considered a value within quarter theory that hold greater significance that say for example $68. Now that we have that information how can we use that to enhance our trading?

Understanding key points within price markets can help to better identify certain price points of interest. These values may be significant psychologically, or even mathematically. Now that we have identified $75 being a key value we can watch to see the reaction at this price level.

Continuing orders of their Citation Longitude Jets

Thrive Aviation is a Charter Operator based out of the Henderson Executive Airport. Within their fleet of now 15 total Textron aircraft they operate a: Citation Longitude, 4 Citation Sovereign+, Citation XLS+, 4 Citation CJ3+, and 2 Citation M2.

The addition of the 3 Citation Longitude jets will expand their fleet to be able to serve a different market within the charter industry. Now the longer range and increase cabin sized on the longitude will allow for Thrive to now be able to operate a market that for example the Citation M2 would not be appropriate for.

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