Archer Aviation (NYSE:ACHR) vs. Textron (NYSE:TXT) Critical Review

Archer Aviation (NYSE:ACHR) and Textron (NYSE:TXT) are both aerospace companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and price targets for Archer Aviation and Textron, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Archer Aviation	1	2	5	0	2.50
Textron	0	9	3	1	2.38

Archer Aviation currently has a consensus target price of $12.00, suggesting a potential upside of 101.85%. Textron has a consensus target price of $98.18, suggesting a potential upside of 7.98%. Given Archer Aviation’s stronger consensus rating and higher possible upside, research analysts clearly believe Archer Aviation is more favorable than Textron.

Insider & Institutional Ownership

59.3% of Archer Aviation shares are held by institutional investors. Comparatively, 86.0% of Textron shares are held by institutional investors. 7.7% of Archer Aviation shares are held by insiders. Comparatively, 1.9% of Textron shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Archer Aviation and Textron’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Archer Aviation	N/A	-37.76%	-32.89%
Textron	6.22%	14.63%	6.33%

Valuation and Earnings

This table compares Archer Aviation and Textron”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Archer Aviation	$300,000.00	14,754.30	-$618.20 million	($0.99)	-6.01
Textron	$14.80 billion	1.07	$921.00 million	$5.11	17.79

Textron has higher revenue and earnings than Archer Aviation. Archer Aviation is trading at a lower price-to-earnings ratio than Textron, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Archer Aviation has a beta of 3.24, indicating that its share price is 224% more volatile than the S&P 500. Comparatively, Textron has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500.

Summary

Textron beats Archer Aviation on 9 of the 15 factors compared between the two stocks.

About Archer Aviation

Archer Aviation Inc., together with its subsidiaries, engages in designs, develops, and operates electric vertical takeoff and landing aircraft for use in urban air mobility. The company was formerly known as Atlas Crest Investment Corp. and changed its name to Archer Aviation Inc. The company is headquartered in San Jose, California.

About Textron

Textron Inc. operates in the aircraft, defense, industrial, and finance businesses worldwide. It operates through six segments: Textron Aviation, Bell, Textron Systems, Industrial, Textron eAviation, and Finance. The Textron Aviation segment manufactures, sells, and services business jets, turboprop and piston engine aircraft, and military trainer and defense aircraft; and offers maintenance, inspection, and repair services, as well as sells commercial parts. The Bell segment supplies military and commercial helicopters, tiltrotor aircrafts, and related spare parts and services. The Textron Systems segment offers unmanned aircraft systems, electronic systems and solutions, advanced marine crafts, piston aircraft engines, live military air-to-air and air-to-ship training, weapons and related components, and armored and specialty vehicles. The Industrial segment offers blow-molded solutions, including conventional plastic fuel tanks and pressurized fuel tanks for hybrid vehicle applications, clear-vision systems, plastic tanks for catalytic reduction systems, and battery housing systems for use in electric vehicles primarily to automobile original equipment manufacturers (OEMs); and golf cars, off-road utility vehicles, powersports products, light transportation vehicles, aviation ground support equipment, professional turf-maintenance equipment, and turf-care vehicles to golf courses and resorts, government agencies and municipalities, consumers, outdoor enthusiasts, and commercial and industrial users. The Textron eAviation segment manufactures and sells light aircraft and gliders with electric and combustion engines; and provides other research and development initiatives related to sustainable aviation solutions. The Finance segment offers financing services to purchase new and pre-owned aviation aircraft and Bell helicopters. Textron Inc. was founded in 1923 and is headquartered in Providence, Rhode Island.