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Raytheon Technologies Corp RTX

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We're Raising Raytheon Technologies' FVE to $81 as Aftermarket Recovery Flows to Results

Burkett Huey, CFA Equity Analyst

Analyst Note

| Burkett Huey, CFA |

Wide-moat-rated Raytheon Technologies reported the first signs of recovery in the commercial aftermarket first quarter and delivered significant sequential improvement in bottom-line results due to the improved operating environment. The firm missed FactSet consensus by a meager 0.7% on sales, but adjusted earnings per share of $0.90 beat consensus by 8.7%. We're raising our fair value estimate by 3.8% to $81 per share as we slightly lower our estimates of medium-term unallocated corporate expense and increase our growth rates at Collins. We view shares as fairly valued at current prices.

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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 Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 181,000