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

Zacks Equity Research

Raytheon (RTN) closed at $174.94 in the latest trading session, marking a +0.67% move from the prior day. This move outpaced the S&P 500's daily gain of 0.12%. Meanwhile, the Dow lost 0.08%, and the Nasdaq, a tech-heavy index, added 0.54%.

Heading into today, shares of the defense contractor had lost 7.17% over the past month, lagging the Aerospace sector's gain of 1.56% and the S&P 500's gain of 3.68% in that time.

Wall Street will be looking for positivity from RTN as it approaches its next earnings report date. This is expected to be July 25, 2019. The company is expected to report EPS of $2.61, up 6.53% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.01 billion, up 5.74% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $11.62 per share and revenue of $28.79 billion, which would represent changes of +9.52% and +6.41%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for RTN. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.05% lower. RTN is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that RTN has a Forward P/E ratio of 14.96 right now. This represents a discount compared to its industry's average Forward P/E of 21.14.

We can also see that RTN currently has a PEG ratio of 1.33. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Aerospace - Defense Equipment industry currently had an average PEG ratio of 2.44 as of yesterday's close.

The Aerospace - Defense Equipment industry is part of the Aerospace sector. This group has a Zacks Industry Rank of 150, putting it in the bottom 42% 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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