Summary
The stock has dropped nearly $25 per share and been dragged down with the market wide sell off. This is providing opportunity to go long at good price levels.
The share price looks appealing in the sub $200 range and is holding a longer term technical support level in the $190 range.
Raytheon is a top three contractor to hold as apart of your defense industry exposure. Investors could benefit picking up some shares heading into 3rd quarter earnings.
The stock is dragging into Q3 earnings, but this provides opportunity
The defense sector hasn't performed well since 2nd quarter earnings and the early October sell off has exacerbated the under-performance. Raytheon (RTN) remains a safe haven in this market environment because they are not affected by Chinese tariffs and continue to derive a majority of their business from the US government. The stock started to lag the Defense and Aerospace ETF (ITA) in early August after the release of Q2 earnings; however, the performance should converge as Q3 earnings are released pre-market October 25th. I mentioned in a previous write up how based on 21 times forward price to earnings of 2019 EPS, I derive a share price of $225 per share.
