Analyst Predicts Improving Year at Textron Aviation

 - February 23, 2021, 10:33 AM

Jeffries equity analyst Sheila Kahyaoglu believes that Textron Aviation is primed for a double-digit sales rebound this year, according to a note sent yesterday to investors. Following a 23 percent decline in 2020 sales, Kahyaoglu looks for sales growth of 14 percent in 2021 at the Wichita airframer.

Kahyaoglu also noted other improving metrics this year for the company that manufactures Cessna Citation business jets and Beechcraft King Air twin turboprops. Specifically, she estimates revenue from Citation sales will increase 31 percent year-over-year, while deliveries will reach 165 aircraft, which would be a 25 percent increase from the 132 jets and turboprops the company delivered in 2020.

Additionally, operating margins are projected to expand from 0.4 percent last year to 5.5 percent this year, Kahyaoglu wrote. She noted the company’s margins were impaired in 2020 partly from $115 million in idle facility costs, $60 million in inventory impairment, and $347 million in volume and mix. Kahyaoglu added those impairments were partially offset by cost actions. Textron Aviation’s cost actions last year included three rounds of layoffs affecting more than 1,100 workers.