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Summary
This is a Cestrian Capital Research “Continuing Coverage” note.
Raytheon (RTN) is a core stock for our New Space Race coverage, and it’s a stock we like. We started coverage on 7 February this year – you can read our Initiating Coverage note here >> Long Range Growth Opportunity - The Raytheon Company. We assigned a “Buy - Long Term Hold” rating and identified a potential short-term trading opportunity.
The company is due to announce Q1 2019 earnings at 0700EDT on 25 April. Here we revisit our thesis on RTN ahead of earnings.
In our recent note covering the pending Northrop Grumman (NOC) Q1 earnings release (here >> Anticipating Q1 Earnings - Northrop Grumman), we set out our approach to earnings reports as regards our long-term buys. (We currently rate both RTN and NOC as Buy - Long Term Hold). For this category of Buy, with a three-year horizon and price target, we consider revenue growth to be the principal indicator of long-term share price appreciation. The EPS number can be impacted by so many factors (one-time charges, write-ups, tax rate changes, acquisitions, restructurings ... etc) that we aren’t in the business of trying to predict it. If the EPS number surprises to the downside, then
