In the latest trading session, Raytheon (RTN) closed at $217.22, marking a +1.08% move from the previous day. This move outpaced the S&P 500's daily gain of 0.91%. Elsewhere, the Dow gained 1.22%, while the tech-heavy Nasdaq added 1%.
Heading into today, shares of the defense contractor had lost 0.05% over the past month, lagging the Aerospace sector's gain of 0.88% and the S&P 500's gain of 1.65% in that time.
RTN will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $3.12, up 6.48% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $8.03 billion, up 9.07% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.86 per share and revenue of $29.29 billion. These totals would mark changes of +11.78% and +8.25%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for RTN. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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 currently has a Zacks Rank of #3 (Hold).
In terms of valuation, RTN is currently trading at a Forward P/E ratio of 18.12. For comparison, its industry has an average Forward P/E of 22.62, which means RTN is trading at a discount to the group.
Investors should also note that RTN has a PEG ratio of 1.7 right now. 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. Aerospace - Defense Equipment stocks are, on average, holding a PEG ratio of 2.45 based on yesterday's closing prices.
The Aerospace - Defense Equipment industry is part of the Aerospace sector. This industry currently has a Zacks Industry Rank of 100, which puts it in the top 40% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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