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

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In the latest trading session, Raytheon Technologies (RTX - Free Report) closed at $99.56, marking a +1.31% move from the previous day. This change lagged the S&P 500's 1.43% gain on the day. At the same time, the Dow added 1.58%, and the tech-heavy Nasdaq lost 0.01%.

Prior to today's trading, shares of the an aerospace and defense company had gained 4.93% over the past month. This has outpaced the Aerospace sector's gain of 1.82% and lagged the S&P 500's gain of 5.12% in that time.

Raytheon Technologies will be looking to display strength as it nears its next earnings release. On that day, Raytheon Technologies is projected to report earnings of $1.24 per share, which would represent year-over-year growth of 14.81%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $18.2 billion, up 6.76% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.76 per share and revenue of $67.18 billion. These totals would mark changes of +11.48% and +4.33%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Raytheon Technologies. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Raytheon Technologies is currently a Zacks Rank #3 (Hold).

Digging into valuation, Raytheon Technologies currently has a Forward P/E ratio of 20.65. Its industry sports an average Forward P/E of 26.49, so we one might conclude that Raytheon Technologies is trading at a discount comparatively.

Investors should also note that RTX has a PEG ratio of 2.18 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Aerospace - Defense Equipment stocks are, on average, holding a PEG ratio of 2.53 based on yesterday's closing prices.

The Aerospace - Defense Equipment industry is part of the Aerospace sector. This group has a Zacks Industry Rank of 155, putting it in the bottom 39% 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.

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


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