Stock Dips As Market Responds To Lack Of Hard Information

The price of Textron stock, inflated dramatically last week by rumors of an impending buyout by middle eastern investors, has lost some air this week as analysts reevaluated the stock.

Dow Jones reports Macquarie Capital analyst Robert Stallard lowered his investment rating to neutral from outperform, saying the risk/reward equation looks less favorable now. Of the potential to realize gains ahead of a potential sale, he added, "...we believe this still makes for a volatile ride that many may choose to avoid."

Cowen & Company analyst Cai Von Rumohr said the drop in Textron's share price this week has to do with investors' inability to really know what's happening behind the scenes.

"The company is not commenting and there really isn't any way to check out this rumor," he said, adding the focus is returning to Textron's upcoming quarterly results.

Those results are expected to be released on April 29; they're also expected to be disappointing. Dow Jones reports analysts polled by Thomson Reuters expect earnings of 2 cents per share on revenue of $2.79 billion.

Even if the rumor is confirmed, the sale could be complicated from a regulatory standpoint. Textron has a mix of consumer products, civil aviation, and defense operations... areas the federal government would likely express reservations about, if the company were sold to a middle eastern concern.

FMI: www.textron.com