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What Does Raytheon Company’s (NYSE:RTN) Share Price Indicate?

Kari Hurd

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Today we’re going to take a look at the well-established Raytheon Company (NYSE:RTN). The company’s stock received a lot of attention from a substantial price increase on the NYSE over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s examine Raytheon’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Raytheon

What is Raytheon worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 0.67% above my intrinsic value, which means if you buy Raytheon today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $183.39, there’s only an insignificant downside when the price falls to its real value. What’s more, Raytheon’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will Raytheon generate?

NYSE:RTN Future Profit February 19th 19
NYSE:RTN Future Profit February 19th 19

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With profit expected to grow by 35% over the next couple of years, the future seems bright for Raytheon. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? RTN’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on RTN, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Raytheon. You can find everything you need to know about Raytheon in the latest infographic research report. If you are no longer interested in Raytheon, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. On rare occasion, data errors may occur. Thank you for reading.