Defense stocks outperformed the market today, after news broke that President Trump fired Tomahawk missiles on a Syrian air base, in response to a chemical attack in the rebel-held area this week. Now, shares of some of the top defense-related companies: Lockheed Martin (LMT), Northrop Grumman (NOC), and Raytheon Company (NYSE:RTN) were all up over 1% on the day. Additionally, the iShares Dow Jones U.S. Aerospace and Defense ETF (NYSEARCA: ITA) shares were up 0.79% on the day.

In addition, crude oil prices ended the week up 3%, which raised concerns that these conflicts could spread throughout major oil producing countries. Now, gold and silver prices spiked once the news of the the air strikes were announced, but gold gave back a bulk of its gains, while silver prices ended up negative, based on futures prices for delivery in May 2017.

Raytheon Shares Rise Over 1%

Moving back to defense stocks. We’re going to focus on Raytheon’s performance and fundamentals because the defense company’s Tomahawk missiles were used against the Syrian air base. Nearly 60 Tomahawk cruise missiles were used in the strikes on the Syrian air base, and that may be an indication that the government may demand more of Raytheon’s defense products.

RTN Statistics and Key Ratios

The stock traded between $151.71 and $155.20 today. RTN has a 52-week range between  $121.01 and $157.59. Therefore, RTN is currently 26.40% above its 52-week low it’s just  under 3% off its 52-week high. RTN is 7.05% above its 200 day simple moving average. Additionally, RTN is and 0.85% above its 50-day SMA.

Here’s a look at the stock’s performance on the daily chart:


RTN has a book value per share (BVPS) of approximately 34. Consequently, it ended today with a price-to-book ratio of 4.49, below the industry average of 5.7. RTN has a price-to-revenue ratio of 1.88. Raytheon has a trailing 12-month price-to-earnings ratio of 20.3, which is slightly above the industry average. Additionally, RTN has forward price-to-revenue, based on next year’s revenues estimates, of around 1.74. Raytheon Company has a forward price-to-earnings ratio of 20.64, based on next year’s earnings estimates.

RTN grew its revenue by FY2016 approximately 3.54%, year over year. Additionally, RTN grew its FY2016 net income by 6.60%, year over year. In turn, its EPS grew by 9.41%, over the same period.

Now, Raytheon Company is expected to report earnings on 2017-04-26*, and the consensus estimate is $1.83. *Note: Raytheon’s earnings date is subject to change.

Final Thoughts

Defense stocks were up on the day, after the strikes on Syria. This sent oil prices higher, as well as gold and silver. However, gold gave back most of its gains, while silver went from positive to negative. Raytheon’s Tomahawk missiles were used for the strikes, and that could bode well for the defense maker.

Author: Jason Bond

Jason taught himself to trade while working as a full-time gym teacher; his trading profits grew eventually allowed him to free himself of over $250,000 in student loans!

Now a multimillionaire and a highly skilled trader and trading coach, Over 30,000 people credit Jason with teaching them how to trade and find profitable trades. Jason specializes in both swing trades and in selling options using spread trades, which balance the risk of selling options. Jason is Co-Founder of and the Foundation which donates trading profits to charity. So far the foundation donated over $600,000 to charity.

Learn More

Leave your comment

Related Articles: