What happened

Shares of Textron (NYSE:TXT) have been the subject of a tug-of-war between bulls drawn to the growth potential in various parts of the industrial conglomerate's portfolio and bears worried about the health of the broader economy and issues in specific Textron businesses.

Bulls got the better of it in June, with shares of Textron climbing 17.1%, according to data provided by S&P Global Market Intelligence. There's reason to believe the gains are sustainable this time around.

So what

Textron shares gained ground in June despite little company-specific news, and the June gains simply reversed a slump in May, leaving the shares basically unchanged over a two-month period. That's par for the course for Textron, a maker of business jets, helicopters, recreational vehicles, and golf carts, among other items. The shares are up nearly 15% year to date, but down 20%, and underperforming the S&P 500 by nearly 30 percentage points, over the past year.

A Citation Longitude business jet parked in front of a sunset.

Textron's Citation Longitude business jet. Image source: Textron.

The company has struggled in part because of sluggish growth in its aviation business, home of Cessna and other small plane brands, with the business jet market having never fully recovered from the 2008-2009 recession. More recently Textron ran into trouble with its industrial segment, maker of golf carts, snowmobiles, and off-road vehicles. Textron has had trouble with the Arctic Cat brand it acquired in 2017, causing pressure on earnings late last year.

There are signs of improvement across the board. Aviation sales and margins were up in the first quarter of the year, as a combination of changes in tax law and an aging corporate fleet fueled belief that at long last a recovery in the sector is at hand. Textron's Cessna unit has a slate of new products to sell into that recovery.

Meanwhile the industrial segment has stabilized, in part because Textron has been able to expand sales channels for newly acquired vehicles, and the helicopter division has a growing backlog and the potential to win some important military orders.

Now what

In recent years it hasn't paid to be an optimist when it comes to Textron. But momentum appears to finally be on the company's side. Textron due to its stumbles is relatively affordable, trading at 10 times earnings compared to business jet rival General Dynamics' 16-times multiple and the 20-times multiples of fellow industrial conglomerates United Technologies and Honeywell International.

I expect aviation to ramp up in the second half of the year and into 2020, and the company's Bell helicopter has the potential to outperform expectations if it can secure some military wins to help offset programs that are sunsetting. There's also the potential for the company to raise full-year guidance in July if the second quarter ends up as strong as the first.

Textron investors in recent years have grown accustomed to the unforeseen setback, and there is the risk something new could come up to reverse the upward momentum. But there is at least reason to hope Textron's strong run in June can continue into the second half of the year.