UPDATE: Raytheon Technologies Corp. (RTX) PT Raised to $118 as Morgan Stanley Sees Outlook as Conservative

January 26, 2022 2:45 AM EST
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Price: $94.95 +2.67%

Rating Summary:
    12 Buy, 3 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 16 | Down: 16 | New: 12
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(Updated - January 26, 2022 7:41 AM EST)

Morgan Stanley analyst Kristine Liwag raised the price target on Raytheon Technologies Corp. (NYSE: RTX) to $118.00 (from $110.00) after shares rose 2.5% on the back of a strong bottom line beat but an outlook that was largely below consensus for 2022. Management guided EPS to a range of $4.60-$4.80 compared with Consensus of $4.95.

Despite the lower guidance, the analyst believes it is due to conservatism and reiterated an Overweight rating, stating "From our conversations with investors, despite the lower than expected outlook, it is viewed as a conservative guide based upon the pace of re-opening for aerospace. We view the company’s strong FCF generation (FCF yield of ~8%), low leverage (net debt to EBITDA of ~2.1x), stable defense business (FY book to bill ~1.02x in 2021), and upside from commercial aerospace recovery positively. We view RTX as a high quality Aerospace and Defense play. We reiterate our Overweight rating as risk/reward skews positive and increase our EPS to $118 from $110."

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