Raytheon Company is suitable for both the Defensive Investor and the Enterprising Investor. The Defensive Investor’s only concern is the low current ratio while the Enterprising Investor has no initial concerns. As a result, all value investors should feel very comfortable proceeding to the next part of the analysis, which is a determination of the company’s intrinsic value.
From a valuation side of things, the company has grown its EPSmg (normalized earnings) from $4.68 in 2010 to an estimated $6.08 for 2014. This demonstrated growth supports the market’s implied estimate of 4.53%, as the actual growth over the last several years has averaged about 6% annually. As a result, the ModernGraham valuation model returns an estimate of intrinsic value within a margin of safety relative to the market price at this time, and the company appears to be fairly valued by the market.
Be sure to check out previous ModernGraham valuations of Raytheon Company (RTN)Â for greater perspective!
Disclaimer: Â The author did not hold aÂ position in Raytheon Company (RTN)Â at the time of publication and had no intention of changing that position within the next 72 hours. Â Logo taken from Wikipedia for the sole purpose of identifying the company; this article is not affiliated with the company in any manner.