Goldman Sachs Downgrades Textron (TXT) to Neutral, Citing Stalled Upside

NEW YORK, NY – July 1, 2025 – Goldman Sachs has revised its rating on Textron (NYSE: TXT) from 'Buy' to 'Neutral', setting a new price target of $85. The downgrade reflects the firm's growing caution regarding the stock's potential for further appreciation, despite acknowledging the underlying strengths within Textron's diverse business segments.

Key Reasons for the Downgrade

Goldman Sachs' decision stems from several factors, primarily the observation that Textron's established positive catalysts have not translated into significant stock performance. While the core investment thesis for Textron remains robust, the market appears to have already priced in these advantages.

Intact Core Thesis, Stalled Stock Performance

The investment bank highlighted that Textron's fundamental strengths, such as the favorable supply and demand dynamics in the business jet market and the anticipated earnings contribution from the Future Long-Range Assault Aircraft (FLRAA) contract, are still valid. However, Goldman's analysts noted that these positive drivers have been present for an extended period without leading to substantial stock appreciation, suggesting a lack of fresh catalysts to propel the stock higher.

Market Share Concerns and Limited Growth Prospects

A significant concern raised by Goldman Sachs is the potential for Textron to be losing market share within its crucial business jet division. This competitive pressure, coupled with what the firm perceives as limited growth opportunities in Textron's Systems and Industrial segments, contributes to the cautious outlook. While Textron currently trades at a discount compared to its industry peers based on valuation multiples, Goldman expressed skepticism about the emergence of new catalysts that could trigger a re-rating of the stock's valuation.

Balanced Risk-Reward Profile

The downgrade ultimately reflects Goldman Sachs' revised assessment that the upside potential for Textron is now more evenly balanced with the inherent risks. This re-evaluation has led the firm to adopt a more cautious stance, moving to the sidelines as it awaits clearer indications of market share gains or the development of new, impactful growth drivers for the company.

Analyst Commentary

Goldman Sachs analysts emphasized that while Textron's fundamentals remain solid, the stock's inability to capitalize on these strengths suggests a period of consolidation or limited growth ahead. The firm will be closely monitoring Textron's performance for signs of renewed momentum or strategic shifts that could alter its current neutral outlook.

This downgrade signals a shift in institutional sentiment towards Textron, suggesting that investors may need to temper expectations for significant short-term gains until new growth narratives emerge.