Raytheon: Mixed Q1 Results from a Long-Term Compounder
Company Update (RTX US) (Buy)
Highlights
RTX has strong businesses in aerospace and defense
Recovery from a weak 2022 will add to mid-term growth
In Q1, a rebound in aerospace offset headwinds in defense
2023 outlook was reaffirmed; we see stronger growth in 2024
Our forecasts show a 41% return (14.2% p.a.) by 2025. Buy
Introduction
We review Raytheon Technologies (RTX), where we have a Buy rating, after Q1 2023 results were released on Tuesday (April 25). RTX shares finished the day down 1.3%, and the share price is up only 2% from a year ago:
Raytheon Share Price (Last 1 Year)
Source: Google Finance (25-Apr-23).
We have followed RTX, including its predecessor United Technologies (UTX), for more than 5 years, and first published our research publicly with a Buy rating in May 2020. Since then RTX shares have gained 66% (including dividends) in just under 3 years, including 48% since the start of 2021.
Q1 results showed that RTX financials continued to be in flux after the exceptional macro environment in 2022. Adjusted EBIT …