Now trading at a price of $85.57, Raytheon Technologies has moved -0.9% so far today.
Raytheon Technologies returned losses of -12.3% last year, with its stock price reaching a high of $104.91 and a low of $68.56. Over the same period, the stock underperformed the S&P 500 index by -32.2%. As of April 2023, the company's 50-day average price was $82.45. RTX Corporation, an aerospace and defense company, provides systems and services for the commercial, military, and government customers worldwide. Based in Arlington, VA, the large-cap Industrials company has 182,000 full time employees. Raytheon Technologies has offered a 2.6% dividend yield over the last 12 months.
Increasing Revenues but Narrowing Margins:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $34,701 | $45,349 | $56,587 | $64,388 | $67,074 | $67,086 |
| Revenue Growth | n/a | 30.68% | 24.78% | 13.79% | 4.17% | 0.02% |
| Operating Margins | 8% | 11% | -3% | 8% | 8% | 5% |
| Net Margins | 15% | 12% | -6% | 6% | 8% | 5% |
| Net Income (MM) | $5,269 | $5,537 | -$3,519 | $3,864 | $5,197 | $3,191 |
| Net Interest Expense (MM) | $1,032 | $1,591 | $1,366 | $1,322 | $1,276 | $1,335 |
| Depreciation & Amort. (MM) | $1,896 | $2,708 | $4,156 | $4,557 | $4,108 | $4,200 |
| Earnings Per Share | $6.5 | $6.41 | -$25.92 | $2.56 | $3.5 | $2.15 |
| EPS Growth | n/a | -1.38% | -504.37% | 109.88% | 36.72% | -38.57% |
| Diluted Shares (MM) | 810 | 864 | 136 | 1,508 | 1,486 | 1,448 |
| Free Cash Flow (MM) | $1,203 | $3,953 | $2,539 | $5,008 | $4,880 | $4,703 |
| Capital Expenditures (MM) | $1,467 | $1,868 | $1,795 | $2,134 | $2,288 | $2,465 |
| Current Ratio | 1.38 | 1.32 | 1.21 | 1.19 | 1.09 | 1.03 |
| Total Debt (MM) | $43,917 | $41,197 | $31,576 | $31,351 | $31,289 | $32,701 |
| Net Debt / EBITDA | 8.43 | 4.76 | 10.05 | 2.47 | 2.63 | 3.69 |
Raytheon Technologies's financial statements include several red flags such as weak operating margins with a negative growth trend, declining EPS growth, and not enough current assets to cover current liabilities. Additionally, the firm has a highly leveraged balance sheet. On the other hand, the company benefits from growing revenues and increasing reinvestment in the business and positive cash flows.
A Lower P/B Ratio Than Its Sector Average but Trades Above Its Graham Number:
Raytheon Technologies has a trailing twelve month P/E ratio of 38.0, compared to an average of 22.19 for the Industrials sector. Based on its EPS guidance of $4.83, the company has a forward P/E ratio of 17.1. The -4.2% compound average growth rate of Raytheon Technologies's historical and projected earnings per share yields a PEG ratio of -9.15. This indicates that its shares are overvalued.In contrast, the market is likely undervaluing Raytheon Technologies in terms of its equity because its P/B ratio is 1.78 while the sector average is 4.06. The company's shares are currently trading 77.5% above their Graham number.
There's an Analyst Consensus of Little Upside Potential for Raytheon Technologies:
The 21 analysts following Raytheon Technologies have set target prices ranging from $62.12 to $102.32 per share, for an average of $81.22 with a hold rating. As of April 2023, the company is trading 1.5% away from its average target price, indicating that there is an analyst consensus of little upside potential.
Raytheon Technologies has an average amount of shares sold short because 4.3% of the company's shares are sold short. Institutions own 81.0% of the company's shares, and the insider ownership rate stands at 0.07%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $10,690,422,644.
