11 Undervalued Aerospace Stocks To Buy According to Hedge Funds

6. Textron Inc. (NYSE:TXT)

Forward Price to Earnings Ratio: 13.24

Number of Hedge Fund Holders: 31

Textron Inc. (NYSE:TXT) is an American conglomerate that manufactures products for consumers across several industries, including aerospace and defense, specialized vehicles, fuel systems, and turf care. It operates within six business segments: Bell, Textron Aviation, Textron eAviation, Textron Systems, Industrial, and Finance.

In November, the U.S. Department of Defense (DoD) awarded Textron Aviation a $277 million contract to produce the T-54A trainer aircraft for the U.S. military. Under the contract, a total of 26 aircraft are expected to be delivered to the Navy, Marine Corps, and Coast Guard, with an estimated completion date of September 2026.

Earlier in the year in May, the U.S. Army selected Textron Systems for the Future Tactical Uncrewed Aircraft System (FTUAS) Option 3 and Option 4 award, under which Textron will complete flight and MOSA demonstrations and deliver an Aerosonde Mk. 4.8 Hybrid Quad (HQ) uncrewed aircraft system (UAS) to the Army for testing and evaluation.

Despite a four-week strike that impacted the aviation industry during Q3, the company generated a revenue of $3.4 billion, up 3% year-over-year. Net income from continuing operations dipped slightly to $1.40 per share, from $1.49 in Q3 2024. Bell registered strong growth in revenue during the quarter, while the FLRAA program’s progression substantially increased the company’s backlog. Textron Inc. (NYSE:TXT) also returned $215 million to shareholders through share repurchases during Q3.

These positive developments have resulted in a general bullish sentiment around Textron Inc. (NYSE:TXT). Wall Street analysts have a consensus Buy rating for the stock, with an average share price upside potential of 23%. Textron is one of the best undervalued aerospace stocks to buy according to hedge funds.