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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Raytheon Technologies Corporation (XNYS:RTX) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
RTX
Name:
RAYTHEON TECHNOLOGIES CORPORATION (XNYS:RTX)
Sector:
- 13000.00K
Industry:
Aerospace & Defense
CEO:
Mr. Gregory J. Hayes
Total Employees:
174,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -133.02% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF RAYTHEON TECHNOLOGIES CORPORATION(RTX) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND AEROSPACE & DEFENSE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
87.59
One Month Price Target:
$88.14
Six Month Price Target :
$90.89
Likely Price in One Year's Time:
Ticker:
$94.19
Likely Trading Range Today Under (Normal Volatility)
$87.13
Price Upper limit ($) :
$88.01
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$82.24
This week:
$75.62
This month :
$63.65
Other Primary facts
Market Cap:
128.69B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
1.48B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.76%
-41.95%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$112.46
$101.21
$62.72
$73.97
Medium risk (<10%) entry points
Buy Call
Sell Call
$97.55
Buy Put:
Sell Put:
$95.14
$77.60
$80.04
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
RTX
Sharpe Ratio:
-1.19%
Comparison:
RTX, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -210.02% lower than the industry
& is -152.37% lower than the market/S&P 500 average
Average Returns/Yield of
RTX
Daily returns:
-0.03%
Weekly returns:
-0.13%
Monthly returns:
-0.53%
Yearly returns:
10.44%
Comparison of returns:
Average annual returns/yield (last 3 years) is -160.96% below industry average
Classification:
RTX, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.49
Statistical test of Returns:
RTX has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.96%
Weekly Volatility:
6.63%
Monthly Volatility:
13.25%
Yearly Volatility:
45.91%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.59%
Volatility in last five trading days has been -80.20% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.11%
Weekly VaR:
-13.67%
Monthly VaR:
-27.34%
How Much Can the price of
RTX
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-24%
Worst case (decline):
-94.70%
This translates to price declining to:
$66.14
This translates to price declining to:
$4.64
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
RTX is a 92.94% riskier investment compared to the market/S&P 500 & is 65.30% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -6.15% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
RTX
Beta in relation to market/S&P 500--1.12
Expected beta in 1 year's time:
0.805
Expected beta in 3 year's time:
1.139
Unlevered (debt free) Beta:
0.799
Beta in relation to Nasdaq (XNAS):
0.749
Beta in relation to all global stocks::
0.909
Beta Comparison & Analysis
Beta of competitors/peers::
1.03
Beta is 8.88% higher than peers
Average Industry Beta:
1.007
Beta is 11.36% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
1.22%
Sustainable growth rate is -93.88% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.172
Alpha is -4457.45% below industry average alpha yield
Alpha is -1095% below the market average
Analysis of Cost of Capital of
RTX
Equity cost of capital:
0.108
Equity cost of capital is 7.80% above industry mean WACC
Unlevered (without debt) cost of capital:
7.71%
Before-tax cost of debt:
4.14%
After-tax cost of debt:
3.27%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.27%
WACC is 16.43% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$43.92
Revenue growth rate per share of (3Y):
1.75
Annual revenue growth rate is -154.59% below industry average
EPS:
$2.78
Expected Annual growth rate of EPS (3Y):
-26.43%
Expected future EPS growth rate is -449.53% lower than the Aerospace & Defense industry
Free cash flow (FCF) per share:
$2.96
Balance sheet equity growth per share: -26.86%
Equity growth rate per share is 15360.49% higher than the industry
Debt per share
$22.31
EBITDA per share
$7.16
Valuation Analysis Today of
RTX
P/E Ratio:
29.29
P/E Ratio of Competitors/Peers:
15.37
P/E ratio is 90.57% higher than main peers & is -37.68% lower than the industry
Stock price/value with industry average P/E ratio: $130.64
RTX is -32.95% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $33.32
Present value of the expected future dividends only: $23.42
P/S (Price to Sales ratio):
1.99
Price to sales ratio is -79.03% below the industry mean
P/B (Price to book value ratio):
1.75
Price to free cash flow: 29.63
Price to free cash flow ratio is -50.05% lower than the industry
Net income growth rate (3Y):
-60.64%
Net income growth rate is -2102.95% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 17.76%
Dividend yeild: 2.37%
Previous Dividend: $0.55
Previous adjusted dividend: $0.55
Previous Dividend: $2.08
Expected next dividend best case: $0.57
Expected next dividend worst case: $0.53
Average dividend payment (long-term): $0.49
Average dividend increase/decrease (growth rate) % per period: 1.79%
Expected next dividend payment date: 14/09/2022
Expected next dividend record date: 18/08/2022
Expected next dividend declaration date: 25/07/2022
Previous dividend payment date: 16/06/2022
Previous dividend record date: 20/05/2022
Previous dividend declaration date: 25/04/2022
Dividend History:
2022-05-19--$0.55
2021-11-18--$0.51
2021-05-20--$0.51
2022-02-24--$0.51
2021-08-19--$0.51
2021-02-25--$0.48
Dividend growth rate is -113.54% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
45.45%
Net debt to equity ratio:
37.34%
Debt to assets ratio:
20.67%
Net debt to assets ratio:
16.98%
Debt-to-asset ratio is -61.49% below industry average
Ability to repay debt:
Interest coverage ratio:
7.72
Interest coverage ratio is -7.23% less than industry average
Looking forward:
Debt growth rate:
-0.59%
Annual debt growth is -101% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.594
Statistical significance of correlation:
RTX has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.541
Stock price is 9.81% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.541
Correlation of price movement with Nasdaq (^IXIC):
0.092
Covariance of price movement with the market:
0.159
Kurtosis
62.019
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-3.945
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
RTX
Gross Profit Margin Ratio:
80%
Operating Profit Margin Ratio:
7.75%
Operating profit margin is -101.56% lower than the industry
Net Profit Margin Ratio:
80%
Effective Tax Rate:
11.11%
Effective tax rate is -53.20% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
5.79%
Return on equity (ROE) is -26.91% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
2.63%
Return on assets (ROA) is -38.36% lower than the industry
Financial Leverage:
1.3x
Current Ratio:
1.16
Current ratio is -63.29% below industry average
Cash Conversion Cycle (days):
73.5
Cash conversion cycle is -87.23% below industry average
The remaining useful life of property plant & equipment is: 4.7 years
Stock based compensation to net income ratio:
2.46%
In-depth Efficiency Analysis
Revenue generated per employee:
372.7K
Each employee generates 8% more revenue than industry average revenue per employee
EBITDA generated per employee:
60.7K
Each employee generates 62% more EBITDA than industry average revenue per employee
Profit generated per employee:
24.1K
Each employee generates 275% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 0.1K
Each employee generates -97% less free cash flow than industry average revenue per employee
Assets/Capital per employee
681.8K
Each employee generates -97% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 5.81%
Growth rate in R&D investment/expenditure is -3443.78% lower than the industry
Competitors/Peer firms of
RTX
CATERPILLAR INC. (XNYS:CAT)
DEERE & COMPANY (XNYS:DE)
THE BOEING COMPANY (XNYS:BA)
GENERAL ELECTRIC COMPANY (XNYS:GE)
LOCKHEED MARTIN CORPORATION (XNYS:LMT)
UNION PACIFIC CORPORATION (XNYS:UNP)
HONEYWELL INTERNATIONAL INC. (XNAS:HON)
FEDEX CORPORATION (XNYS:FDX)
Canadian National Railway Company (XNYS:CNI)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: -
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
64.85B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
51.92B
12.93B
2.78B
-
5.47B
-
- 315000.00K
7.94B
44.00M
1.37B
4.45B
10.57B
5.03B
4.20B
5.02B
557.00M
4.20B
Statement of Cash Flow
Date:
Period:
1.01B
Differed Income Tax :
- 601000.00K
Stock Based Compensation :
103.00M
Change in Working Capital :
- 897000.00K
Accounts Receivables:
556.00M
Other Working Capital:
- 50000.00K
Other Non-Cash Items:
- 269000.00K
Net Cash Provided by Operating Activities:
476.00M
Investments in PP&E:
-
Net Acquisitions:
35.00M
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
6.04B
-
6.04B
20.64B
9.75B
4.31B
40.74B
16.75B
54.32B
38.12B
2.77B
-
6.68B
118.63B
-
159.37B
8.27B
164.00M
-
13.74B
12.88B
35.06B
32.94B
17.35B
50.29B
-
85.34B
37.50B
50.59B
- 2115000.0K
-
March 31, 2022 at 6:00:00 AM
59.86B
72.46B
157.81B
-
33.10B
27.1B
-
- 553000.00K
- 518000.00K
-
-
- 743000.00K
- 745000.00K
- 257000.00K
- 1745000.00K
15.00M
- 1813000.00K
6.04B
7.85B
476.00M
- 489000.00K
- 13000.00K
Our Proprietary Portfolio Rating
Our Rating:
A
Price Forecast/Expected Price in Next 5 Years of
RTX
2023
2024
2025
2026
2027
$81.70
$87.86
$94.48
$101.60
$109.25