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Raytheon (RTN) Gains As Market Dips: What You Should Know

Zacks Equity Research

In the latest trading session, Raytheon (RTN) closed at $196.74, marking a +0.93% move from the previous day. This move outpaced the S&P 500's daily loss of 0.01%. At the same time, the Dow added 0.06%, and the tech-heavy Nasdaq lost 0.06%.

Heading into today, shares of the defense contractor had gained 4.25% over the past month, lagging the Aerospace sector's gain of 5.27% and outpacing the S&P 500's gain of 3.23% in that time.

Wall Street will be looking for positivity from RTN as it approaches its next earnings report date. In that report, analysts expect RTN to post earnings of $2.86 per share. This would mark year-over-year growth of 27.11%. Our most recent consensus estimate is calling for quarterly revenue of $7.22 billion, up 6.06% from the year-ago period.

RTN's full-year Zacks Consensus Estimates are calling for earnings of $11.73 per share and revenue of $28.94 billion. These results would represent year-over-year changes of +10.56% and +6.94%, respectively.

Investors should also note any recent changes to analyst estimates for RTN. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. RTN is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that RTN has a Forward P/E ratio of 16.62 right now. This valuation marks a discount compared to its industry's average Forward P/E of 22.91.

Also, we should mention that RTN has a PEG ratio of 1.56. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Aerospace - Defense Equipment stocks are, on average, holding a PEG ratio of 2.18 based on yesterday's closing prices.

The Aerospace - Defense Equipment industry is part of the Aerospace sector. This group has a Zacks Industry Rank of 38, putting it in the top 15% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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