Raytheon Technologies (RTX) topped earnings views early Tuesday, but revenue and guidance came in light. Several defense companies, including General Dynamics (GD) report this week as military spending hits a milestone.
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Raytheon stock fell slightly early Tuesday, while other key defense stocks were not yet active. All are trading near buy points within short bases.
Global military spending topped $2 trillion for the first time, growing by 0.7% in 2021 to reach $2.113 trillion, according to a report released Monday by the Stockholm International Peace Research Institute. The growth trend is likely to intensify this year, as Europe hikes defense spending after the Feb. 24 Russian invasion of Ukraine.
Defense stocks surged in late February and expect to benefit from the higher spending. But last week Lockheed Martin (LMT) earnings took a hit from supply disruptions due to the Covid-19 omicron variant and rising inflation.
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Raytheon Earnings
Estimates: Analysts on Wall Street expect Raytheon Technologies earnings to rebound 13% to $1.01 per share on a 4% sales bounce to $15.798 billion.
Results: Raytheon earnings rose to $1.15 a share while revenue advanced 3% to $15.72 billion.
Outlook: For the full year, Raytheon sees adjusted EPS of $4.60-4.80 on sales of $67.75 billion to $68.75 billion. Both are slightly below consensus.
The aerospace and defense giant says it will buy at least $2.5 billion in RTX stock in 2022.
Raytheon, with Lockheed, makes the Javelin anti-tank missile used effectively by Ukrainian troops vs. Russian armored vehicles.
Raytheon Stock
Shares fell nearly 2% before the open on the stock market today, signaling at least another test of the 50-day moving average. Raytheon stock dipped 0.9% to 99.68 on Monday but closed above the 50-day. Intraday, RTX stock nearly triggered an automatic sell signal, falling almost 7% below a recently cleared 104.44 flat-base buy point. The relative strength line for RTX stock remains near highs after a solid rally in the past year.
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