Textron's (NYSE:TXT) Initial 2011 Guidance Probably Conservative Says UBS (NYSE:UBS)

The guidance of Textron (NYSE:TXT) for 2011 could be extremely important, based on the big move in the share price since the middle of November.

UBS said, "TXT shares have been on a run as it comes to price in the potential recovery at Cessna. While we believe 2012-13 earnings potential remains the key to the stock, upcoming 2011 guidance takes on increased importance given the recent share price move. Our slightly above consensus estimate appears doable, although we expect initial guidance to start off conservative given what we think is still a lack of visibility into any sort of business jet recovery.

"We are raising our PT, reflecting a blend of market multiples on our 2012 EPS estimate (was 2011E) and DCF analysis. We believe it is now more appropriate to use a multiple on 2012E given push out in the bizjet recovery."

UBS maintains a "Neutral" rating on Textron (TXT), which closed Monday at $27.14, gaining $0.51, or 1.92 percent. UBS raised their price target on Textron from $22 to $27.