Intrinsic value of Raytheon - RTN

Previous Close

$197.56

  Intrinsic Value

$189.49

stock screener

  Rating & Target

hold

-4%

Previous close

$197.56

 
Intrinsic value

$189.49

 
Up/down potential

-4%

 
Rating

hold

We calculate the intrinsic value of RTN stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 57.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  5.10
  5.09
  5.08
  5.07
  5.07
  5.06
  5.05
  5.05
  5.04
  5.04
  5.03
  5.03
  5.03
  5.03
  5.02
  5.02
  5.02
  5.02
  5.02
  5.01
  5.01
  5.01
  5.01
  5.01
  5.01
  5.01
  5.01
  5.01
  5.01
  5.00
Revenue, $m
  26,641
  27,997
  29,419
  30,912
  32,478
  34,121
  35,845
  37,654
  39,553
  41,546
  43,638
  45,833
  48,138
  50,557
  53,097
  55,762
  58,561
  61,499
  64,583
  67,821
  71,220
  74,789
  78,536
  82,469
  86,599
  90,935
  95,488
  100,268
  105,287
  110,556
Variable operating expenses, $m
  22,915
  24,006
  25,150
  26,350
  27,610
  28,931
  30,318
  31,774
  33,301
  34,904
  35,099
  36,865
  38,719
  40,665
  42,707
  44,851
  47,102
  49,465
  51,946
  54,550
  57,285
  60,155
  63,169
  66,333
  69,655
  73,142
  76,804
  80,649
  84,686
  88,924
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  22,915
  24,006
  25,150
  26,350
  27,610
  28,931
  30,318
  31,774
  33,301
  34,904
  35,099
  36,865
  38,719
  40,665
  42,707
  44,851
  47,102
  49,465
  51,946
  54,550
  57,285
  60,155
  63,169
  66,333
  69,655
  73,142
  76,804
  80,649
  84,686
  88,924
Operating income, $m
  3,726
  3,991
  4,269
  4,561
  4,868
  5,189
  5,527
  5,881
  6,252
  6,642
  8,539
  8,968
  9,419
  9,892
  10,389
  10,911
  11,458
  12,033
  12,637
  13,270
  13,935
  14,634
  15,367
  16,137
  16,945
  17,793
  18,684
  19,619
  20,601
  21,632
EBITDA, $m
  7,014
  7,371
  7,745
  8,138
  8,550
  8,983
  9,437
  9,913
  10,413
  10,938
  11,488
  12,066
  12,673
  13,310
  13,979
  14,680
  15,417
  16,191
  17,003
  17,855
  18,750
  19,689
  20,676
  21,711
  22,799
  23,940
  25,139
  26,397
  27,719
  29,106
Interest expense (income), $m
  231
  273
  331
  391
  454
  521
  590
  664
  740
  821
  906
  994
  1,087
  1,185
  1,288
  1,396
  1,509
  1,627
  1,752
  1,883
  2,020
  2,164
  2,316
  2,475
  2,641
  2,817
  3,000
  3,193
  3,396
  3,609
  3,833
Earnings before tax, $m
  3,453
  3,660
  3,878
  4,107
  4,347
  4,599
  4,863
  5,140
  5,431
  5,737
  7,544
  7,881
  8,234
  8,605
  8,994
  9,402
  9,831
  10,281
  10,754
  11,250
  11,771
  12,318
  12,892
  13,495
  14,128
  14,793
  15,490
  16,223
  16,992
  17,800
Tax expense, $m
  932
  988
  1,047
  1,109
  1,174
  1,242
  1,313
  1,388
  1,466
  1,549
  2,037
  2,128
  2,223
  2,323
  2,428
  2,539
  2,654
  2,776
  2,904
  3,038
  3,178
  3,326
  3,481
  3,644
  3,815
  3,994
  4,182
  4,380
  4,588
  4,806
Net income, $m
  2,521
  2,672
  2,831
  2,998
  3,173
  3,357
  3,550
  3,752
  3,965
  4,188
  5,507
  5,753
  6,011
  6,281
  6,565
  6,864
  7,177
  7,505
  7,850
  8,213
  8,593
  8,992
  9,411
  9,851
  10,314
  10,799
  11,308
  11,843
  12,404
  12,994

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  32,449
  34,101
  35,833
  37,651
  39,559
  41,560
  43,660
  45,864
  48,177
  50,604
  53,152
  55,826
  58,633
  61,580
  64,673
  67,920
  71,329
  74,907
  78,664
  82,607
  86,748
  91,095
  95,658
  100,450
  105,480
  110,762
  116,307
  122,129
  128,242
  134,660
Adjusted assets (=assets-cash), $m
  32,449
  34,101
  35,833
  37,651
  39,559
  41,560
  43,660
  45,864
  48,177
  50,604
  53,152
  55,826
  58,633
  61,580
  64,673
  67,920
  71,329
  74,907
  78,664
  82,607
  86,748
  91,095
  95,658
  100,450
  105,480
  110,762
  116,307
  122,129
  128,242
  134,660
Revenue / Adjusted assets
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
Average production assets, $m
  18,009
  18,926
  19,887
  20,896
  21,955
  23,066
  24,231
  25,454
  26,738
  28,085
  29,499
  30,983
  32,541
  34,177
  35,893
  37,695
  39,587
  41,573
  43,658
  45,847
  48,145
  50,557
  53,090
  55,749
  58,541
  61,472
  64,550
  67,781
  71,174
  74,736
Working capital, $m
  -959
  -1,008
  -1,059
  -1,113
  -1,169
  -1,228
  -1,290
  -1,356
  -1,424
  -1,496
  -1,571
  -1,650
  -1,733
  -1,820
  -1,911
  -2,007
  -2,108
  -2,214
  -2,325
  -2,442
  -2,564
  -2,692
  -2,827
  -2,969
  -3,118
  -3,274
  -3,438
  -3,610
  -3,790
  -3,980
Total debt, $m
  6,121
  7,239
  8,412
  9,643
  10,934
  12,289
  13,711
  15,203
  16,769
  18,412
  20,137
  21,947
  23,848
  25,843
  27,937
  30,135
  32,442
  34,865
  37,408
  40,078
  42,881
  45,824
  48,914
  52,157
  55,563
  59,139
  62,893
  66,834
  70,973
  75,318
Total liabilities, $m
  21,968
  23,086
  24,259
  25,490
  26,781
  28,136
  29,558
  31,050
  32,616
  34,259
  35,984
  37,794
  39,695
  41,690
  43,784
  45,982
  48,289
  50,712
  53,255
  55,925
  58,728
  61,671
  64,761
  68,004
  71,410
  74,986
  78,740
  82,681
  86,820
  91,165
Total equity, $m
  10,481
  11,015
  11,574
  12,161
  12,777
  13,424
  14,102
  14,814
  15,561
  16,345
  17,168
  18,032
  18,939
  19,890
  20,889
  21,938
  23,039
  24,195
  25,408
  26,682
  28,020
  29,424
  30,898
  32,445
  34,070
  35,776
  37,567
  39,448
  41,422
  43,495
Total liabilities and equity, $m
  32,449
  34,101
  35,833
  37,651
  39,558
  41,560
  43,660
  45,864
  48,177
  50,604
  53,152
  55,826
  58,634
  61,580
  64,673
  67,920
  71,328
  74,907
  78,663
  82,607
  86,748
  91,095
  95,659
  100,449
  105,480
  110,762
  116,307
  122,129
  128,242
  134,660
Debt-to-equity ratio
  0.580
  0.660
  0.730
  0.790
  0.860
  0.920
  0.970
  1.030
  1.080
  1.130
  1.170
  1.220
  1.260
  1.300
  1.340
  1.370
  1.410
  1.440
  1.470
  1.500
  1.530
  1.560
  1.580
  1.610
  1.630
  1.650
  1.670
  1.690
  1.710
  1.730
Adjusted equity ratio
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,521
  2,672
  2,831
  2,998
  3,173
  3,357
  3,550
  3,752
  3,965
  4,188
  5,507
  5,753
  6,011
  6,281
  6,565
  6,864
  7,177
  7,505
  7,850
  8,213
  8,593
  8,992
  9,411
  9,851
  10,314
  10,799
  11,308
  11,843
  12,404
  12,994
Depreciation, amort., depletion, $m
  3,288
  3,380
  3,476
  3,577
  3,683
  3,794
  3,910
  4,033
  4,161
  4,296
  2,950
  3,098
  3,254
  3,418
  3,589
  3,770
  3,959
  4,157
  4,366
  4,585
  4,814
  5,056
  5,309
  5,575
  5,854
  6,147
  6,455
  6,778
  7,117
  7,474
Funds from operations, $m
  5,809
  6,052
  6,307
  6,575
  6,856
  7,151
  7,460
  7,785
  8,126
  8,483
  8,457
  8,851
  9,265
  9,699
  10,155
  10,633
  11,135
  11,663
  12,216
  12,797
  13,407
  14,048
  14,720
  15,426
  16,168
  16,946
  17,763
  18,621
  19,522
  20,467
Change in working capital, $m
  -47
  -49
  -51
  -54
  -56
  -59
  -62
  -65
  -68
  -72
  -75
  -79
  -83
  -87
  -91
  -96
  -101
  -106
  -111
  -117
  -122
  -128
  -135
  -142
  -149
  -156
  -164
  -172
  -181
  -190
Cash from operations, $m
  5,855
  6,101
  6,358
  6,629
  6,912
  7,210
  7,522
  7,850
  8,194
  8,555
  8,533
  8,930
  9,348
  9,786
  10,246
  10,729
  11,236
  11,768
  12,327
  12,914
  13,530
  14,176
  14,855
  15,568
  16,316
  17,102
  17,927
  18,793
  19,702
  20,657
Maintenance CAPEX, $m
  -1,713
  -1,801
  -1,893
  -1,989
  -2,090
  -2,195
  -2,307
  -2,423
  -2,545
  -2,674
  -2,809
  -2,950
  -3,098
  -3,254
  -3,418
  -3,589
  -3,770
  -3,959
  -4,157
  -4,366
  -4,585
  -4,814
  -5,056
  -5,309
  -5,575
  -5,854
  -6,147
  -6,455
  -6,778
  -7,117
New CAPEX, $m
  -877
  -917
  -962
  -1,009
  -1,059
  -1,111
  -1,166
  -1,223
  -1,284
  -1,347
  -1,414
  -1,484
  -1,558
  -1,635
  -1,717
  -1,802
  -1,892
  -1,986
  -2,085
  -2,189
  -2,298
  -2,413
  -2,533
  -2,659
  -2,792
  -2,931
  -3,078
  -3,231
  -3,393
  -3,562
Cash from investing activities, $m
  -2,590
  -2,718
  -2,855
  -2,998
  -3,149
  -3,306
  -3,473
  -3,646
  -3,829
  -4,021
  -4,223
  -4,434
  -4,656
  -4,889
  -5,135
  -5,391
  -5,662
  -5,945
  -6,242
  -6,555
  -6,883
  -7,227
  -7,589
  -7,968
  -8,367
  -8,785
  -9,225
  -9,686
  -10,171
  -10,679
Free cash flow, $m
  3,265
  3,383
  3,504
  3,631
  3,764
  3,904
  4,050
  4,204
  4,365
  4,534
  4,310
  4,496
  4,692
  4,897
  5,112
  5,338
  5,575
  5,824
  6,085
  6,359
  6,647
  6,949
  7,267
  7,600
  7,950
  8,317
  8,702
  9,107
  9,532
  9,978
Issuance/(repayment) of debt, $m
  1,071
  1,118
  1,173
  1,231
  1,291
  1,355
  1,422
  1,492
  1,566
  1,643
  1,725
  1,810
  1,900
  1,995
  2,094
  2,198
  2,308
  2,423
  2,543
  2,670
  2,803
  2,943
  3,090
  3,244
  3,406
  3,576
  3,754
  3,942
  4,138
  4,345
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,071
  1,118
  1,173
  1,231
  1,291
  1,355
  1,422
  1,492
  1,566
  1,643
  1,725
  1,810
  1,900
  1,995
  2,094
  2,198
  2,308
  2,423
  2,543
  2,670
  2,803
  2,943
  3,090
  3,244
  3,406
  3,576
  3,754
  3,942
  4,138
  4,345
Total cash flow (excl. dividends), $m
  4,336
  4,501
  4,677
  4,862
  5,055
  5,259
  5,472
  5,696
  5,931
  6,177
  6,035
  6,307
  6,592
  6,891
  7,206
  7,536
  7,883
  8,246
  8,628
  9,029
  9,450
  9,892
  10,356
  10,844
  11,355
  11,892
  12,456
  13,048
  13,670
  14,323
Retained Cash Flow (-), $m
  -518
  -533
  -560
  -587
  -616
  -646
  -678
  -712
  -747
  -784
  -823
  -864
  -907
  -952
  -999
  -1,049
  -1,101
  -1,156
  -1,213
  -1,274
  -1,337
  -1,404
  -1,474
  -1,548
  -1,625
  -1,706
  -1,791
  -1,881
  -1,974
  -2,073
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  177
  186
  196
  206
  216
  227
  239
  251
  264
  277
  291
  305
  321
  337
  354
  372
  390
  410
  430
  452
  475
  499
  524
  550
  577
  606
  637
  668
  702
  737
Cash available for distribution, $m
  3,818
  3,968
  4,117
  4,274
  4,439
  4,612
  4,794
  4,984
  5,184
  5,393
  5,212
  5,443
  5,685
  5,940
  6,207
  6,487
  6,782
  7,091
  7,415
  7,755
  8,113
  8,488
  8,882
  9,296
  9,730
  10,186
  10,665
  11,168
  11,696
  12,250
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  3,660
  3,632
  3,583
  3,520
  3,441
  3,347
  3,238
  3,115
  2,978
  2,828
  2,475
  2,323
  2,162
  1,994
  1,822
  1,649
  1,476
  1,306
  1,142
  985
  839
  704
  582
  473
  379
  297
  229
  173
  128
  92
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Raytheon Company is a technology company, which specializes in defense and other government markets. The Company develops integrated products, services and solutions in various markets, including sensing; effects; command, control, communications, computers, cyber and intelligence; mission support, and cybersecurity. The Company operates through five segments: Integrated Defense Systems (IDS); Intelligence, Information and Services (IIS); Missile Systems (MS); Space and Airborne Systems (SAS), and Forcepoint. The IDS segment develops and produces sensors and mission systems. The IIS segment provides a range of technical and professional services to intelligence, defense, federal and commercial customers. The MS segment is a developer, integrator and producer of missile and combat systems. The SAS segment is engaged in the design, development and manufacture of integrated sensor and communication systems for missions. The Forcepoint segment develops cybersecurity products.

FINANCIAL RATIOS  of  Raytheon (RTN)

Valuation Ratios
P/E Ratio 26.2
Price to Sales 2.4
Price to Book 5.7
Price to Tangible Book
Price to Cash Flow 20.3
Price to Free Cash Flow 26
Growth Rates
Sales Growth Rate 3.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 36.8%
Cap. Spend. - 3 Yr. Gr. Rate 13.7%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 52.5%
Total Debt to Equity 52.5%
Interest Coverage 14
Management Effectiveness
Return On Assets 8%
Ret/ On Assets - 3 Yr. Avg. 8.3%
Return On Total Capital 14.3%
Ret/ On T. Cap. - 3 Yr. Avg. 14.2%
Return On Equity 21.8%
Return On Equity - 3 Yr. Avg. 21.6%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 25.4%
Gross Margin - 3 Yr. Avg. 24.7%
EBITDA Margin 15.7%
EBITDA Margin - 3 Yr. Avg. 15.6%
Operating Margin 13.5%
Oper. Margin - 3 Yr. Avg. 13.4%
Pre-Tax Margin 12.6%
Pre-Tax Margin - 3 Yr. Avg. 12.5%
Net Profit Margin 9.2%
Net Profit Margin - 3 Yr. Avg. 9.3%
Effective Tax Rate 28.3%
Eff/ Tax Rate - 3 Yr. Avg. 27%
Payout Ratio 38.4%

RTN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the RTN stock intrinsic value calculation we used $25348 million for the last fiscal year's total revenue generated by Raytheon. The default revenue input number comes from 2017 income statement of Raytheon. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our RTN stock valuation model: a) initial revenue growth rate of 5.1% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for RTN is calculated based on our internal credit rating of Raytheon, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Raytheon.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of RTN stock the variable cost ratio is equal to 86.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for RTN stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Raytheon.

Corporate tax rate of 27% is the nominal tax rate for Raytheon. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the RTN stock is equal to 0.7%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for RTN are equal to 67.6%.

Life of production assets of 10 years is the average useful life of capital assets used in Raytheon operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for RTN is equal to -3.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $9963 million for Raytheon - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 289 million for Raytheon is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Raytheon at the current share price and the inputted number of shares is $57.1 billion.

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COMPANY NEWS

▶ Nearly $1B distributed to DFW defense contractors in last 2 weeks   [Aug-15-18 07:38AM  American City Business Journals]
▶ Raytheon Laser 1, Drone 0   [Aug-14-18 07:17PM  Motley Fool]
▶ How Spirit AeroSystems pay compares to other public aerospace companies   [03:23PM  American City Business Journals]
▶ Is Raytheon Company a Buy?   [Aug-10-18 08:06AM  Motley Fool]
▶ Raytheon unveils new $72M radar-testing facility in Andover   [Aug-06-18 02:57PM  American City Business Journals]
▶ SwRI gets slice of a $794M U.S. Navy contract   [03:22PM  American City Business Journals]
▶ An Investor's Primer on the Defense Sector   [Aug-02-18 04:50PM  Motley Fool]
▶ Better Buy: Raytheon Company vs. Huntington Ingalls   [Aug-01-18 08:03PM  Motley Fool]
▶ 5 Best Defense Stocks to Buy on Trade Wars   [09:30AM  TheStreet.com]
▶ 5 Defense Stocks to Buy Now: Market Recon   [08:09AM  TheStreet.com]
▶ 5 Defense Stock to Buy Now: Market Recon   [08:09AM  TheStreet.com]
▶ Boeing, SpaceX To Benefit As Pentagon Readies This Historic Change   [Jul-31-18 04:02PM  Investor's Business Daily]
▶ 5 Top Stock Trades for Friday Morning   [03:58PM  InvestorPlace]
▶ Raytheon: 2Q Earnings Snapshot   [07:35AM  Associated Press]
▶ Earnings Preview: Raytheon   [Jul-25-18 03:43PM  Benzinga]
▶ All eyes on technology as a growing employer in Arizona   [Jul-20-18 08:00AM  American City Business Journals]
▶ Breaking down the big defense contracts awarded to DFW companies this year   [Jul-19-18 02:16PM  American City Business Journals]
▶ Massachusetts is home to 5 of the worlds largest 500 companies   [12:59PM  American City Business Journals]
▶ Raytheon demos small x-band precision approach radar   [Jul-17-18 02:09PM  PR Newswire]
▶ Mass. firms ban once-common question: How much do you make?   [02:48PM  American City Business Journals]
▶ Raytheon looks to hire 500 in Andover   [Jul-13-18 05:51AM  American City Business Journals]
▶ Lockheed, Northrop, Raytheon win multibillion-dollar missile defense contract   [Jul-10-18 11:47PM  American City Business Journals]
▶ Why Raytheon Stock Is a Strong Buy Before Earnings   [Jul-06-18 10:02AM  InvestorPlace]
▶ One Patriotic Stock to Put on Your July 4 Shopping List   [Jul-02-18 06:18PM  TheStreet.com]
▶ Raytheon designing U.S. Army laser   [09:00AM  PR Newswire]
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