Trade of the Day: TXT Stock is About to Take Off

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Textron Inc. (NYSE:TXT) — This aerospace and industrial giant makes Cessna business jets, Bell helicopters, and other industrial and military equipment components.

S&P Capital IQ rates TXT stock a “buy” and recently raised its price target to $50 from $43. Its analysts estimate sales will increase by 19% in both 2015 and 2016 as the company benefits from new Cessna models and drone sales. But this may turn out to be conservative considering President Obama’s request for additional funding from Congress to meet threats from the Islamic State and the acquisition of aircraft manufacturer Beech Holdings.

Capital IQ raised it 2015 EPS estimate to $2.55 from $2.52 recently, and expects 2016 earnings will increase 17% to $2.98 per share. Other firms have upgraded TXT stock, as well. Earlier this month, Bank of America Corp (NYSE:BAC) raised its opinion of shares to “buy” from “neutral” and upped the price target to $50 from $44.

From a technical point of view, TXT stock completed a change of trend in October with a powerful breakaway gap that vaulted shares through their 50-day and 200-day moving averages in just five sessions.

Since November, TXT stock has been consolidating in a right triangle with support at its intermediate trendline and 50-day moving average at $42 to $42.26. Right triangles usually break in the direction of the major trend, which is bullish.

Note the buy signal from my proprietary indicator, the Collins-Bollinger Reversal (CBR), at $41, which supports the continuation of the uptrend.

Buy TXT stock on a break through resistance at $44 for a trade to $52 and a potential 18% gain.

TXT Stock Chart
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Chart Key


Article printed from InvestorPlace Media, https://investorplace.com/2015/02/textron-inc-txt-stock-trade-day/.

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