RTN Investment Analysis Report & Stock Research, Raytheon Company

Raytheon Company (RTN)

RTN Stock Report

2-Year Price History

View Larger RTN Chart
(10/9 4:00PM)
Open$45.54 Mkt Cap$17.8 Billion
High$46.16 52Wk High$53.00
Low$45.54 52Wk Low$33.20
Volume2.4 Million Avg Vol 10D2.9 Million

Ockham’s Rating/Recommendation Summary

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RTN Revenue

Cash earnings is the most important factor in our analysis, but it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company’s stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, RTN the high and low end of the Price to Sales per share ratios are 1.29x and 0.90x respectively.

Notice that RTN’s current Price to Sales per share ratio is 0.74x, which is significantly below its average levels historically. In fact, with a current price of $45.59, RTN is a full 33% below its average Price to Sales ratio at comparable sales levels. This is a rare occurrence and, when taken in context of the other areas of our analysis, can be a strong positive for our outlook for RTN.

RTN Cash Earnings

As the old saying goes, "Cash is King!" We look at reported Cash Earnings, but the main emphasis of our analysis involves stripping out non-cash events such as depreciation from our cash earnings analysis. This helps us view the cash flows more clearly. Nevertheless, an analysis of Cash Earnings (both reported and otherwise) is absolutely pivotal to assessing a company’s value, and currently RTN is significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for RTN, the current level of Cash Earnings compared to its historical levels helps identify where RTN is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 16.57 and a historical low Cash Earnings per share ratio of 11.60, an investor can relate where value becomes optimal.

So what does "significantly below" mean when we talk about Price to Cash Earnings numbers for RTN? From the Ockham perspective, we are looking specifically at RTN to see if the market is recognizing the huge disparity between RTN’s past stock price to Cash Earnings ratio to today’s levels. At a difference of 43% below the average historical Price to Cash Earnings ratio, our view would be quite positive at this point. However, as with all metrics, we need to also take other factors into account when looking at RTN. While we view better Cash Earnings metrics as very important, if the market is slow to identify this value, or if Cash Earnings were to fall from these levels, we would become more neutral in our stance.

RTN Dividends

A positive Ockham rating does not require a company to pay out an inviting dividend or a dividend at all. However, we believe dividends provide a useful measure of a company’s inherent expectations.

Comparable to our analysis of Sales and Cash Earnings per share, we examine dividend yields from RTN against the historic high and low levels over an available data range. Because RTN has an established history of paying a dividend to shareholders, there is value in comparing recent dividends to historical dividends. In RTN’s case, the estimated annual dividend is $1.24 producing a current dividend yield of 2.72%. The highest dividend yield from RTN in recent history was 3.73% while the lowest dividend yield was 1.07%. Therefore, the current dividend yield of RTN is above the historical median by 13.33%. This is definitely a positive in our view.

Peer Comparison


Raytheon Company Industry Grouping

Company Ticker Market Cap (Ml) Latest
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not incuding RTN) 8.46 5.26 » 33.41 0.92 0.53 » 1.85 13.04% 27.35%
*10 year range does not include current year values
Lockheed Martin Corp. LMT $28.1 Billion $73.00 7.26 5.71 » 30.81 0.65 0.52 » 1.23 6.07% 44.22%
Honeywell International, Inc. HON $27.7 Billion $36.84 8.63 4.63 » 77.26 0.84 0.44 » 1.86 9.61% 22.60%
General Dynamics Corp. GD $25.1 Billion $65.28 8.48 4.58 » 21.38 0.80 0.45 » 1.75 12.01% 19.20%
Raytheon Company RTN $17.8 Billion $45.59 8.05 5.87 » 25.19 0.74 0.56 » 1.32 5.06% 12.46%
L-3 Communications Holdings Inc LLL $8.9 Billion $76.25 7.74 5.80 » 19.15 0.58 0.46 » 1.64 24.10% 11.96%
Rockwell Collins, Inc. COL $8.0 Billion $50.50 10.20 5.59 » 18.45 1.75 0.77 » 2.80 13.41% 38.76%

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The Latest Financial News
8:30:14 AM RTN $46.20 Raytheon Company
9/10/2009 8:30 AM
3:27:44 PM RTN $46.63 Raytheon Company
9/1/2009 3:27 PM
“…Raising price target on the stock to $29. It is nearly $29. Lockheed martin on a hold, ray thee onto a buy. RAYTHEON outperformed lockheed since the market low. >> aig shares plunging after underperform following a 200% run runup in the stock. Cnbc’s matt nesto takes a look within the day’s hardest hit >> it is a casualty report. It is a regular war zone out not only for the financials but the insurers for the four industry group, far and away the hardest hit.V the internet comparison of the …” – RTN on Closing Bell
7:35:17 AM RTN $44.75 Raytheon Company
9/1/2009 7:35 AM
“…Budget and keep it on schedule. Will that help lockheed stock tough to tell. It seems like it might go a little bit higher. Citigroup also out this morning with an upgrade of lockheed to a buy rating. They downgraded competitor RAYTHEON. Downgraded RAYTHEON and upgraded lockheed. We will keep an eye on defense contractors contractors today. With that over to ashley to see how the european markets are shaping up this morning. Ashley: not so good. Good morning connell. Good morning everybody. Green across the board in asia. That same sentiment certainly not coming through into europe. Let’s take a look at the latest numbers for you. We have been in the same trading range. We did start the day on an up note believe it or not but quickly went south. …” – RTN on Money For Breakfast
7:50:02 AM RTN $44.75 Raytheon Company
7/23/2009 7:50 AM
“…Ford, out of at&t, three for pretty much. >> yeah, I think so.Xl8l >> a lot of the smaller guys, too. RAYTHEON raising guidance. >> when we come back, more on earnings. She fought on the front lines of the financial crisis as a top citi executive, sallie krawcheck now she’s out on her own and speaking out. …” – RTN on Squawk Box
7:33:12 AM RTN $44.75 Raytheon Company
7/23/2009 7:33 AM
“…Pretty good report out that jeff flock was reporting earlier today. Out of the drug sector, wyeth as merck and pfizer had done before able to beat expectations in the most recent quarter. And RAYTHEON in a better before we wrap this up, jetblue is just crossing with its earnings report so let me go to that one real quick here as well. The jetblue expectation was …” – RTN on Money For Breakfast
7:16:14 AM RTN $44.75 Raytheon Company
7/23/2009 7:16 AM
“…of $0.80-1.20 vs. $1.56 consensus. Issues downside FY ’09 EPS guidance of $4.00-5.00 vs. $5.24 consensus. Shares -2.3% premarket (6:50 ET). (PR) RAYTHEON (RTN): Q2 EPS of $1.24 beats by $0.11. Revenue of $6.1B (+4%) vs. $6.2B. (PR) Starwood Hotels & Resorts Worldwide (HOT): Q2 EPS of $0.22 beats by $0.05. Revenue of $1.2B (-23%) in-line. Issues downside guidance: sees Q3 EPS of $0.06-0.10 vs. $0.21 consensus, FY ’09 EPS of $0.65 vs. $0.76 …” – RTN on Seeking Alpha Wall St Breakfast
7:02:09 AM RTN $44.75 Raytheon Company
7/23/2009 7:02 AM
“…Share on adjusted basis for wyeth. Net revenue, $5.7 billion for the big drugmaker wyeth in the most recent quarter. Go to defense contractors here real quick and talk about RAYTHEON. We talked about this industry earlier this week. $1.24 a share excluding certain items. …” – RTN on Money For Breakfast
6:38:41 PM RTN $44.75 Raytheon Company
6/23/2009 6:38 PM
“…The 11:00. Conagra, I like that guy. Disappointing quarter, but RAYTHEON, great defense play. Flextronics is an assembler of technology. It has been a total bow wow. Abbott labs one of the best in the game. …” – RTN on Mad Money
6:37:58 PM RTN $44.75 Raytheon Company
6/23/2009 6:37 PM
“…Wonderful to talk to you. Abbott labs, abt, conagra foods, cag, RAYTHEON, rtn and procter …” – RTN on Mad Money
3:26:35 PM RTN $44.71 Raytheon Company
6/23/2009 3:26 PM
“…Bankruptcy filing by rival yrc worldwide. Con ag gra to buy from neutral because of strong mo moeshl activity in moderating commodity morgan joseph initiating coverage of RAYTHEON with a bye rating because threats from iran and north korea could boost demand for the company’s missile defense system. >>> treasuries are bouncing back. …” – RTN on Closing Bell
4:18:14 PM RTN $44.65 Raytheon Company
5/29/2009 4:18 PM
“…Competitiveness. The government spends over $15 billion a year on cyber industry analysts expect that figure to increase to $25 billion in the next four years. Major defense contractors including RAYTHEON, general dynamic, boeing, lockheed martin, northrop grumman are all competing for that cyber security business. >> from now on, our digital …” – RTN on Closing Bell
2:53:52 PM RTN $44.07 Raytheon Company
5/29/2009 2:53 PM
“…>> a new merrill lynch study estimates the cyber security market will hit $26 billion over the next 3 years. The big defense contractors are jumping in. Boeing, lockheed martin, RAYTHEON, along with general dynamics have thrown their hats in the ring. As far as the cyber security czar the president is expected to name, apparently there are three names on the short list. He did not name them today. >>> how would you like to play …” – RTN on Street Signs
9:26:13 AM RTN $44.69 Raytheon Company
5/29/2009 9:26 AM
“…And we’re talking about morgan stanley positively and mastercard and visa getting positive comments, bob doll talking positively about RAYTHEON with tiffany and of course, general motors. >> thanks so much. Let’s open it up to round two, see what everybody is looking let’s start with ashley, so he …” – RTN on The Opening Bell on Fox Business
1:48:03 PM RTN $44.56 Raytheon Company
5/27/2009 1:48 PM
“…Of systems for these countries to purchase. If you’re in south korea, you missile defense capabilities. That’s good for lockheed, boeing, RAYTHEON. Puts the issue front and center on we need to figure how to defend ourselves on this type of >> stuart: there’s a lot of pressure to rescind these cuts in missile defense because of …” – RTN on Fox Business
6:36:34 PM RTN $43.50 Raytheon Company
5/21/2009 6:36 PM
“…What RAYTHEON’s balance sheet was compared to the other big defense contractors, i.E., boeing, lockheed martin, general dynamics and RAYTHEON as we move forward in this new administration and what the spending priorities are. >> RAYTHEON has been unable trying to make it better and better and better and they’ve done a good job. Secondly, it’s a well-managed company, but it’s come on very, very strong and a lot of what’s happened there is this guy …” – RTN on Mad Money
3:23:27 PM RTN $44.79 Raytheon Company
5/19/2009 3:23 PM
“…>>> hi, folks. Welcome back to the "closing bell." RAYTHEON won a $260 million contract from the navy to overhaul and upgrade the fal phalanx weapons system. …” – RTN on Closing Bell
9:44:59 AM RTN $45.27 Raytheon Company
5/18/2009 9:44 AM
“…Nice move. On the flip side, they’re cautious on defense. Ray RAYTHEON be lowered here. Northrop grumman leaps right on to the conviction sell list and down they go. Separate those two growths. Let’s get right out to david …” – RTN on Squawk On The Street
10:54:39 AM RTN $47.56 Raytheon Company
5/11/2009 10:54 AM
“…Some sort of u.S. Manufacturing we don’t want to outsource all of our industrial base. We don’t want to outsource northrop grumman or boeing or the defense contractors like RAYTHEON because we believe there is some sort of national interest in producing a domestic base to produce those products. We feel that’s important in this country, then the key is about balance. …” – RTN on Squawk On The Street
2:31:22 PM RTN $46.29 Raytheon Company
4/29/2009 2:31 PM
“…Apollo group benefiting from the rise of people seeking higher education when jobs are hard to you need defense for the selling united healthcare, RAYTHEON are >> you just heard our stock side of the equation. An historic opportunity to buy they could go up for the next where does that leave you, bill? >> forget treasuries. …” – RTN on Street Signs
6:46:03 PM RTN $43.82 Raytheon Company
4/24/2009 6:46 PM
“…From columbus the other day we had a nice sit-down and I had to tell them, listen, gentlemen, you ain’t seen nothing yet, I think your company could be very lockheed martin, RAYTHEON. I think general dynamics is terrific with a great backlog, and I am a buyer right here. Pulling the trigger. General dynamics. And the "lightning round" is …” – RTN on Mad Money
8:03:23 AM RTN $41.30 Raytheon Company
4/23/2009 8:03 AM
“…I think we probable kwi already showed the number. It was a clear miss. Also, second quarter earnings will miss consensus. However, if you want to look for that — that’s the loser. Look at this winner in RAYTHEON. Always good to do some business with the government. Getting a boost, the defense giant’s first quarter earnings in revenue beating the street. RAYTHEON also raising its outlook for the year, and just on the bid, that stock is up $3. Just on the bid. That could be up $3 or $4. On u.P.S., how much? …” – RTN on Squawk Box
7:56:43 AM RTN $41.30 Raytheon Company
4/23/2009 7:56 AM
“…Like beatles. >>> u.P.S., you just heard. 4 cents below. Revenue well below. Warning about next quarter, 45 to 55 versus 65. RAYTHEON had a good number on both the bottom line and the top an increased full year guidance. That is going to be a nice winner today. Hershey 38 cents, 3 cents above on better than expected revenue. What was that? …” – RTN on Squawk Box
7:30:36 AM RTN $41.30 Raytheon Company
4/23/2009 7:30 AM
“…So far, so good if you’re a talking about dow futures higher by 40 points above fair value. This comes on a morning when we’ve gotten several earnings of companies reporting better than expected results, including RAYTHEON, fifth third, sun trust, marriott, all those numbers out. And we are awaiting still additional numbers this morning, including conoco phillips. Take a look at some of the top stories this morning. Chrysler’s lenders are now …” – RTN on Squawk Box
7:06:07 AM RTN $41.30 Raytheon Company
4/23/2009 7:06 AM
“…Our hall of fame where there’s interactivity, where you can follow up on this. He is really a visionary and a great leader. I didn’t know you were — is he going to be on this morning? We just had the RAYTHEON earnings right in the middle of earnings season. We try to juggle interviewing guys like you with this breaking news. Let’s talk about when we were in …” – RTN on Squawk Box
7:05:23 AM RTN $41.30 Raytheon Company
4/23/2009 7:05 AM
“…Fire, keep all these balls in the air? >> this is where you get all the stim stimulation. >> that’s right. >> just hearing becky talk about my good friend bill swanson from RAYTHEON, who’s a great ceo. He’s done a heck of a job. >> lexington man, right? And they’re one of the biggest employers in new england. High-paying jobs. They have tremendous backlogs. …” – RTN on Squawk Box
7:04:21 AM RTN $41.30 Raytheon Company
4/23/2009 7:04 AM
“…Slumping sales and growing no details on the exact timing. Word is the plan will include the normal two-week closure in july, the change from one model year to the next. >>> real quickly, we’ll just mention RAYTHEON is actually raising their value for the year. Coming in with 92 cents a share. Is that the real number? If so, that’s below. They’re talking about how they’re increasing their …” – RTN on Squawk Box
7:02:16 AM RTN $41.30 Raytheon Company
4/23/2009 7:02 AM
“…That is only 1/2 of 1% gain certainly better than 20 to 40 percent losses we have on most stocks we bring up. Hershey operating number 38 from chocolate to a defense contractor, RAYTHEON is just reporting its numbers right now so let’s go over that number. $1.11 a share it looks as the headline coming out. $1.01 was the estimate. So you are 10 cents better than expected there for RAYTHEON. It also says it is increasing its full year guidance. RAYTHEON says it is upping its guidance sales coming in at 5.9 billion dollars versus an expectation of 5.6 billion. A company raising its guidance, RAYTHEON doing it this morning. No volume on the stock. You see the longer term chart behind me but it is not move sog far in the premarket — not moving so far in the premarket. Ashley webster is standing by …” – RTN on Money For Breakfast
4:57:52 PM RTN $41.30 Raytheon Company
4/22/2009 4:57 PM
“…You don’t want to miss that. >> i’m matt nesto. We’re going to be watching for another busy day on the earnings ups, union pacific, conoco philips, credit suisse and RAYTHEON just to name a few. Then after the close amazon, amgen, american express, and >> rick santelli on the floor of the cme. Tune in tomorrow 8:30 eastern. …” – RTN on Closing Bell
4:10:09 PM RTN $42.50 Raytheon Company
4/9/2009 4:10 PM
“…The target of takeover talk all week. A published report says a consortium of middle east company is offering $21 a share for the company. Lockheed martin and RAYTHEON have been mentioned. Textron shares up 9d 90% over the weekend. >>> apple hiked its price target …” – RTN on Closing Bell
6:08:55 PM RTN $40.88 Raytheon Company
4/7/2009 6:08 PM
“…Or with civilians such as we have summer coming up. A lot of hunting, cam sxpg >> well, I don’t know. I like your traditional approach. I like RAYTHEON very much. They deliver. Northrop grumman down two after a big run yesterday. The interesting thing about the defense stocks is there were no big cuts. It was a heavily shorted group, …” – RTN on Mad Money
4:40:51 PM RTN $40.88 Raytheon Company
4/7/2009 4:40 PM
“…Pnc down 5%, first niagara up 5.5%. Textron up on rumors that it’s a takeover target. Investors speculating either lockheed martin or RAYTHEON could be enticed by its steep stock decline. There it is at $9 a share. Down 80% in the last year. Jpmorgan upgrading sunoco from …” – RTN on Closing Bell
3:00:26 PM RTN $41.17 Raytheon Company
4/6/2009 3:00 PM
“…Taking from one with, adding to another. Look at defense stocks. They like it here. Lockheed martin up 8 1/4%. General dynamics better than 4 1/2. RAYTHEON, northrop and boeing higher. Big gain for RAYTHEON, up 7%. Stocks are overall retreating after a month long rally and talks for ibm to buy sun micro systems for $7 billion. …” – RTN on Countdown to the Closing Bell
1:54:37 PM RTN $39.32 Raytheon Company
4/6/2009 1:54 PM
“…I know you’re not a stock analyst, but are the things they’re talking about, are they to benefit these companies. Lockheed martin is up $1.79 now. RAYTHEON is up 95 cents. Boeing is down right now, though. >> I don’t want to speculate on why boeing is up or down. The defense business remains a good business. …” – RTN on Power Lunch
3:40:44 PM RTN $39.01 Raytheon Company
3/31/2009 3:40 PM
“…Again, though, the stock is some $55 under the 52-week high. So from a valuation standpoint and the name being thrown around as RAYTHEON as a potential buyer, we are on this one as well. And like I say, heavy volume on both of these two. Much bigger than normal. 20 times normal volume in …” – RTN on Closing Bell
5:52:47 PM RTN $38.80 Raytheon Company
3/30/2009 5:52 PM
“…>> reporter: when it comes to national security in obama’s $600 billion in defense budget investors set their sights on the big guns like boeing, lockheed martin and RAYTHEON. Highway to the danger zone >> reporter: but when it comes to what the government doesn’t want anyone to see, there’s axis …” – RTN on Fast Money
5:43:18 PM RTN $40.10 Raytheon Company
3/26/2009 5:43 PM
“…Emerging markets and the eem good for % on the day. Mr. Seymour, what’s going on? >> commodities, lower rates, risk aversion it is all in the market’s favor. >> RAYTHEON, largest missile maker in the world. Where do we stand in defense land? >> you look at the february numbers of the defense spending, last night raised their dividend 11% and that’s all good. …” – RTN on Fast Money
4:59:14 PM RTN $40.10 Raytheon Company
3/26/2009 4:59 PM
“…Of "fast money" pointed out that they were up huge across the board and there was a two-day meeting with civilian and military leaders assessing the u.S. Military enterprise ask there you see northrop grumman, RAYTHEON, lockheed martin, general dynamics, all of them up almost in the 7% range on the best buy news also came out better than expected today and the bond auction for the …” – RTN on Closing Bell
7:47:32 AM RTN $37.23 Raytheon Company
3/26/2009 7:47 AM
“…Average volume. If you think oil continues to go up, you want some exposure to it, I think this is a better play than some other oil companies out there. RAYTHEON has come down tremendously, a lot of people are concerned also about the somewhere along the line a cut I like the fact that it has come down a lot. I mean, listen, this is not …” – RTN on Money For Breakfast
4:54:37 PM RTN $35.30 Raytheon Company
3/23/2009 4:54 PM
“…We had only six members of the s&p 500 not participating in the rally sun microsystems one of takeover candidate perhaps. H&r block also in there. Autozone, RAYTHEON and dynegy, if you’re keeping score at home. All 30 dow components higher. >> huge jump. The bank plan turned into …” – RTN on Bulls & Bears
6:41:10 PM RTN $36.33 Raytheon Company
3/18/2009 6:41 PM
“…Bracket bustin sooners from >> } fighting words. Okay, what’s up? >> caller: I just came from the finest organization of the world, the u.S. Navy. Went to worth for RAYTHEON. >> thank you for conserving. First of all, thank you for RAYTHEON is a problem for me because if I want to have a company that I think has more dividend, um, i’m going to send you to lockheed martin. If i’m going to send you to one that I think that has more — …” – RTN on Mad Money
View All Raytheon Company News

Key Fundamentals

RTN – Raytheon Company Fundamentals
Price (10/9 4:00PM) $46.11
Volume (10/9 4:00PM) 2.4 Million
Last Close Price $45.59
10 Day Average Volume 2.9 Million
13 Week Price Range $42.23 – $48.64
52 Week Price Range $33.20 – $53.00
LTM Revenue $24.0 Billion
Shares Outstanding (12/2008) 389.4 Million
Market Capitalization $17.8 Billion
Shares Held By Institutions 306.8 Million
Institutional Holders 821
% Shares Held By Institutions 78.80%
Earnings Per Share (EPS) $3.94
P/E Ratio 10.40
Book Value Per Share $24.25
Gross Margin 21.80%
Annual Dividend 1.24
Dividend Yield 2.70%
Beta 0.67
Fiscal Year Ends December

About Raytheon Company

Raytheon Company is considered to operate in the Industrial Goods sector. They specifically operate in the Aerospace – Defense – Major Diversified business segment contained within the Aerospace/Defense industry.

The Company together with its subsidiaries is engaged in defense and government electronics, space, information technology and technical services.