Raytheon Technologies Delivers Strong Q2 Results; Shares Pop 3%

Raytheon Technologies (RTX) shares jumped 2.64% on Tuesday after the company delivered second-quarter results that topped estimates, fuelled by gains in the defense businesses. Sales in the quarter totaled $15.9 billion, beating consensus estimates of $15.82 billion.

Adjusted earnings came in at 1.03 per share versus $0.93 per share projected by analysts. During the quarter, Raytheon Technologies repurchased $632 million worth of shares. According to the CEO, Greg Hayes, the impressive Q2 results affirm the company’s ability to continue capitalizing on the recovery in the aerospace sector. (See Raytheon Technologies stock charts on TipRanks)

Hayes stated, “As a result of our industry-leading franchises and differentiated technologies, we generated significant program wins during the quarter that will drive continued top and bottom-line growth well into the future.”

Management has since raised its sales guidance for the full year to between $64.4 and $65.4 billion from initial guidance of $63.9 billion to $65.4 billion. Adjusted earnings per share are expected between $3.85 and $4 per share, up from the initial guidance of between $3.50 and $3.70. Free cash flow is forecast between $4.5 and $5 billion from $4.5 billion initially expected.

Yesterday, Cowen & Co. analyst Cai Rumohr reiterated a Buy rating on the stock with a $95 price target, implying 7.69% upside potential to current levels. According to the analyst, Q2 results affirm strong execution.

Rumohr stated, “Solid Q2 beat reflected A/M vigor at Collins and strong execution; and full year guide was hiked from RTX’s conservative initial forecast. Investors should be pleased.”

Consensus among analysts is a Strong Buy based on 8 Buys and 1 Holds. The average Raytheon Technologies price target of $98.75 implies 12% upside potential to current levels.

RTX scores a 7 out of 10 on TipRanks’ Smart Score rating system, suggesting that the stock is likely to perform in line with market averages.