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

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In the latest trading session, Raytheon (RTN - Free Report) closed at $185.27, marking a +1.02% move from the previous day. This change lagged the S&P 500's 1.3% gain on the day. At the same time, the Dow added 1.41%, and the tech-heavy Nasdaq gained 1.75%.

Coming into today, shares of the defense contractor had lost 0.62% in the past month. In that same time, the Aerospace sector gained 5.87%, while the S&P 500 gained 0.46%.

RTN will be looking to display strength as it nears its next earnings release. On that day, RTN is projected to report earnings of $2.86 per share, which would represent year-over-year growth of 27.11%. Our most recent consensus estimate is calling for quarterly revenue of $7.22 billion, up 6.06% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.73 per share and revenue of $28.94 billion. These totals would mark changes of +10.56% and +6.94%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for RTN. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.34% higher within the past month. RTN is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note RTN's current valuation metrics, including its Forward P/E ratio of 15.63. Its industry sports an average Forward P/E of 22.91, so we one might conclude that RTN is trading at a discount comparatively.

Investors should also note that RTN has a PEG ratio of 1.46 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. The Aerospace - Defense Equipment was holding an average PEG ratio of 2.1 at yesterday's closing price.

The Aerospace - Defense Equipment industry is part of the Aerospace sector. This group has a Zacks Industry Rank of 76, putting it in the top 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.

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