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

Zacks Equity Research
·3-min read

Raytheon Technologies (RTX) closed at $60.80 in the latest trading session, marking a +1.86% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.8%. Elsewhere, the Dow gained 0.43%, while the tech-heavy Nasdaq added 0.5%.

Investors will be hoping for strength from RTX as it approaches its next earnings release, which is expected to be October 27, 2020. On that day, RTX is projected to report earnings of $0.48 per share, which would represent a year-over-year decline of 78.28%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $15.37 billion, down 21.16% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.16 per share and revenue of $64.28 billion, which would represent changes of -61.74% and -16.57%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for RTX. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 has moved 3.32% lower within the past month. RTX is currently sporting a Zacks Rank of #4 (Sell).

Looking at its valuation, RTX is holding a Forward P/E ratio of 18.87. This valuation marks a discount compared to its industry's average Forward P/E of 27.57.

Investors should also note that RTX has a PEG ratio of 1.57 right now. 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 8.46 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 224, putting it in the bottom 12% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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 RTX in the coming trading sessions, be sure to utilize Zacks.com.


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