NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Aerospace & Defense industry. The net income increased by 110.6% when compared to the same quarter one year prior, rising from $208.00 million to $438.00 million.
- The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Aerospace & Defense industry and the overall market on the basis of return on equity, RAYTHEON CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- The gross profit margin for RAYTHEON CO is rather low; currently it is at 22.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 7.00% trails that of the industry average.
- Net operating cash flow has significantly decreased to -$87.00 million or 121.75% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
Raytheon Company designs, develops, manufactures, integrates, and supports technological products, services, and solutions for governmental and commercial customers in the United States and internationally. The company has a P/E ratio of 7.5, above the average aerospace/defense industry P/E ratio of 7.3 and below the S&P 500 P/E ratio of 17.7. Raytheon has a market cap of $14.2 billion and is part of the
industry. Shares are down 14% year to date as of the close of trading on Monday.
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