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Raytheon Technologies (RTX) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3 min read

Raytheon Technologies (RTX) closed the most recent trading day at $71.51, moving +0.21% from the previous trading session. This move lagged the S&P 500's daily gain of 0.64%. At the same time, the Dow added 0.65%, and the tech-heavy Nasdaq gained 0.14%.

Heading into today, shares of the an aerospace and defense company had lost 0.81% over the past month, lagging the Aerospace sector's gain of 1.23% and the S&P 500's gain of 3.19% in that time.

Investors will be hoping for strength from RTX as it approaches its next earnings release. The company is expected to report EPS of $0.73, down 62.37% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $16.24 billion, down 16.94% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.01 per share and revenue of $64.28 billion, which would represent changes of -63.56% and -16.56%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for RTX. 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. 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.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. RTX is currently a Zacks Rank #5 (Strong Sell).

Digging into valuation, RTX currently has a Forward P/E ratio of 23.69. This represents a discount compared to its industry's average Forward P/E of 37.35.

Also, we should mention that RTX has a PEG ratio of 1.97. 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 10.89 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 181, which puts it in the bottom 30% 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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