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

Zacks Equity Research

Raytheon (RTN) closed at $165.71 in the latest trading session, marking a +1.76% move from the prior day. The stock outpaced the S&P 500's daily gain of 1.32%. Meanwhile, the Dow gained 1.38%, and the Nasdaq, a tech-heavy index, added 1.74%.

Heading into today, shares of the defense contractor had gained 3.1% over the past month, lagging the Aerospace sector's gain of 6.16% and the S&P 500's gain of 4.16% 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 January 31, 2019. On that day, RTN is projected to report earnings of $2.88 per share, which would represent year-over-year growth of 41.87%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.50 billion, up 10.6% from the year-ago period.

Investors should also note any recent changes to analyst estimates for RTN. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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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. Over the past month, the Zacks Consensus EPS estimate has moved 1.17% lower. RTN is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, RTN is currently trading at a Forward P/E ratio of 13.88. This represents a discount compared to its industry's average Forward P/E of 17.74.

Meanwhile, RTN's PEG ratio is currently 1. 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 2.08 as of yesterday's close.

The Aerospace - Defense Equipment industry is part of the Aerospace sector. This group has a Zacks Industry Rank of 46, putting it in the top 18% 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.


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