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Raytheon (RTN) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, Raytheon (RTN) closed at $185.33, marking a +1.42% move from the previous day. This change outpaced the S&P 500's 0.06% gain on the day. Elsewhere, the Dow gained 0.16%, while the tech-heavy Nasdaq lost 0.13%.

Heading into today, shares of the defense contractor had gained 1.75% over the past month, lagging the Aerospace sector's gain of 3.34% and outpacing the S&P 500's loss of 2.95% in that time.

Investors will be hoping for strength from RTN as it approaches its next earnings release. In that report, analysts expect RTN to post earnings of $2.86 per share. This would mark year-over-year growth of 27.11%. Meanwhile, our latest consensus estimate is calling for revenue of $7.22 billion, up 6.06% from the prior-year quarter.

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.

It is also important to note the recent changes to analyst estimates for RTN. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.34% higher. RTN currently has a Zacks Rank of #3 (Hold).

Investors should also note RTN's current valuation metrics, including its Forward P/E ratio of 15.58. This valuation marks a discount compared to its industry's average Forward P/E of 22.91.

We can also see that RTN currently has a PEG ratio of 1.46. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. RTN's industry had an average PEG ratio of 2.09 as of yesterday's close.

The Aerospace - Defense Equipment industry is part of the Aerospace sector. This group has a Zacks Industry Rank of 67, putting it in the top 27% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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