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Raytheon Technologies Corp RTX

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Morningstar’s Analysis

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Raytheon Technologies Posts Strong Quarter as Commercial Aftermarket Recovers Faster Than Expected

Burkett Huey, CFA Equity Analyst

Analyst Note

| Burkett Huey, CFA |

Wide-moat-rated Raytheon Technologies posted strong results in both its aerospace businesses, due to the commercial aftermarket perking up materially with increased flight activity, and its defense businesses, due to strong bookings for missile products and in classified areas. Adjusted earnings per share of $1.03 beat FactSet consensus by 11%. We are increasing our fair value estimate to $83 per share from $81 as we revise our medium-term commercial aerospace expectations upward, though this is partially offset by Morningstar’s higher corporate tax assumptions.

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Company Profile

Business Description

Raytheon Technologies is a diversified aerospace and defense industrial company formed from the merger of United Technologies and Raytheon, with roughly equal exposure as a supplier to the commercial aerospace manufactures and to the defense market as a prime and subprime contractor. The company operates in four segments: Pratt & Whitney, an engine manufacturer, Collins Aerospace, which is a diversified aerospace supplier, and intelligence, space and airborne systems, a mix between a sensors business and a government IT contractor, and integrated defense and missile systems, a defense prime contractor focusing on missiles and missile defense hardware.

870 Winter Street
Waltham, MA, 02451
T +1 781 522-3000
Sector Industrials
Industry Aerospace & Defense
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 181,000