PROVIDENCE – It was another volatile trading session for shares of Textron Inc. on Monday after the company was downgraded by a Wall Street analyst.
After soaring by nearly 50 percent Thursday on rumors of a pending takeover bid, Textron stock (NYSE:TXT) slid 10 percent today, closing at $12.21 per share in composite trading on the New York Stock Exchange. (The markets were closed on Friday because of the Good Friday holiday.)
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Thursday’s run-up was fueled by a report in a Kuwaiti newspaper that a group of investors in the United Arab Emirates were planning to buy Textron for $21 per share. Earlier in the week, there were other rumors that the company could be bought by a domestic competitor such as Raytheon or Lockheed Martin. Textron is not commenting on the rumors.
In a research note on Monday, Macquarie Capital analyst Robert Stallard downgraded his rating on Textron to neutral from outperform, saying the speculation surrounding the company “makes for a volatile ride that many may choose to avoid,” according to Dow Jones Newswires. However, Stallard raised his price target for the stock from $9 to $13.
Stallard said the possibility of investors from the Middle East buying Textron “would appear to make more sense” than a U.S.-based takeover, adding that the idea of selling off its defense businesses “is also sensible” because it would mute concerns over U.S. national security.
At one point on Monday, shares of the Providence-based conglomerate were off by more than 20 percent, hitting an intraday low of $10.76 – though that was still above its closing price last Wednesday of $9.11, prior to the report from Kuwait, as Dow Jones noted.
Another analyst quoted by Dow Jones, Cai Von Rumohr of Cowen & Company, said investors likely were disappointed that no new information on the takeover bid had come out since the original report last week.
Even after the recent upswing, Textron shareholders have had a tough year. Last April, the company’s stock was trading at around $60 a share.
Textron is one of the largest public companies with offices in Rhode Island, with 541 employees in the state last year, according to PBN research.
Textron is expected to report results for the first quarter on April 29. In a survey by Thomson Reuters, analysts said they expect the company to earn 2 cents a share and report revenue of $2.79 billion, Dow Jones reported.
Textron Inc. (NYSE: TXT) is a $14.2 billion company employing 42,000 people in 28 countries. Its brands include Bell Helicopter, Cessna Aircraft Co., Jacobsen, Kautex, Lycoming, E-Z-GO and Greenlee, among others. Additional information is available at www.textron.com.
