Raytheon Technologies Corp. (RTX) Beats Led by Collins...Again - Jefferies
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Jefferies analyst Sheila Kahyaoglu reiterated a Buy rating and $105.00 price target on Raytheon Technologies Corp. (NYSE: RTX) after Q2:21 EPS was better led by Collins. Revs grew 10% organically in Q2 w/ a similar trajectory (10% increase for Q3) and sales up 1% for 2021.
The analyst stated "Our 2021 EPS est. moves to $4.00 from $3.70 to reflect better Collins performance ($0.12 beat in Q2) coupled with a lower tax rate (16% vs. 19% previously adding $0.13). EPS rises to $6.40 through 2023. This reflects comm'l AM sales surpassing its 2019 peak by 4%, while OE remains ~20% below. We est. a 3% CAGR for the defense businesses (RMD + RIS) over the period." "There is continued momentum in profitability and the next leg up likely depends on WB/int'l traffic (down 75% vs. 2019 in May). The outlook for Collins appears conservative. As such, we raise our 2021 EPS est to $4.00 from $3.70 to reflect better Collins trends w/ EPS rising to $6.40 through 2023.The biggest risk in our view is execution as it relates to FCF."
Shares of Raytheon Technologies Corp. closed at $86.95 yesterday.
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