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

Shutterstock photo

Raytheon (RTN) closed the most recent trading day at $187.35, moving +1.38% from the previous trading session. This change lagged the S&P 500's 2.12% gain on the day. At the same time, the Dow added 2.13%, and the tech-heavy Nasdaq gained 2.64%.

Heading into today, shares of the defense contractor had lost 9.67% over the past month, lagging the Aerospace sector's loss of 8.09% and the S&P 500's loss of 4.4% in that time.

RTN will be looking to display strength as it nears its next earnings release, which is expected to be January 24, 2019. On that day, RTN is projected to report earnings of $2.82 per share, which would represent year-over-year growth of 38.92%. Meanwhile, our latest consensus estimate is calling for revenue of $7.48 billion, up 10.27% from the prior-year quarter.

RTN's full-year Zacks Consensus Estimates are calling for earnings of $10.09 per share and revenue of $27.17 billion. These results would represent year-over-year changes of +32.41% and +7.2%, respectively.

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.

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.

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 1.87% higher. RTN currently has a Zacks Rank of #2 (Buy).

Investors should also note RTN's current valuation metrics, including its Forward P/E ratio of 18.32. This represents a discount compared to its industry's average Forward P/E of 19.39.

We can also see that RTN currently has a PEG ratio of 1.38. 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. RTN's industry had an average PEG ratio of 2.12 as of yesterday's close.

The Aerospace - Defense Equipment industry is part of the Aerospace sector. This industry currently has a Zacks Industry Rank of 87, which puts it in the top 34% 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.

To follow RTN in the coming trading sessions, be sure to utilize Zacks.com.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Raytheon Company (RTN): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Investing Ideas , Stocks
Referenced Symbols: RTN

More from Zacks.com




Equity Research

Research Brokers before you trade

Want to trade FX?