Shares of Raytheon were gaining 0.1% to $103.65 in morning trading.
The analyst firm raised its revenue estimates for the aerospace company's Intelligence and Information Systems segment by about $150 million for 2015 and about $160 million in 2016.
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"We figure that amortization expense and the short term cost of funds offset any operating contribution to 2015 results," analysts Howard A. Rubel, Sheila Kahyaoglu, and Greg Konrad wrote. "The business should make a modest contribution to the bottom line in 2016. We have also assumed a somewhat smaller share count for 2015 and 2016 than in prior models."
The analysts also noted that Raytheon is on track to repurchase more than $900 million in stock in 2014.
Separately, TheStreet Ratings team rates RAYTHEON CO as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate RAYTHEON CO (RTN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- RAYTHEON CO has improved earnings per share by 9.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, RAYTHEON CO increased its bottom line by earning $5.96 versus $5.66 in the prior year. This year, the market expects an improvement in earnings ($6.87 versus $5.96).
- The current debt-to-equity ratio, 0.40, is low and is below the industry average, implying that there has been successful management of debt levels.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Aerospace & Defense industry average. The net income increased by 5.3% when compared to the same quarter one year prior, going from $489.00 million to $515.00 million.
- You can view the full analysis from the report here: RTN Ratings Report