Price to Earnings (P/E)
since 2005
Calculation
Raytheon Co., P/E, long-term trends, calculation
| P/E | = | Share price1, 2, 3 | ÷ | Earnings per share1 (EPS) | EPS1 | = | Net income attributable to Raytheon Company1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 12, 2020 | 19.14 | = | 229.76 | ÷ | 12.01 | 12.01 | = | 3,343 | ÷ | 278,441,000 | |
| Feb 13, 2019 | 17.56 | = | 180.94 | ÷ | 10.31 | 10.31 | = | 2,909 | ÷ | 282,239,000 | |
| Feb 14, 2018 | 30.30 | = | 212.58 | ÷ | 7.02 | 7.02 | = | 2,024 | ÷ | 288,506,000 | |
| Feb 15, 2017 | 20.13 | = | 151.96 | ÷ | 7.55 | 7.55 | = | 2,211 | ÷ | 292,880,000 | |
| Feb 10, 2016 | 18.25 | = | 126.57 | ÷ | 6.94 | 6.94 | = | 2,074 | ÷ | 298,998,000 | |
| Feb 11, 2015 | 14.67 | = | 107.15 | ÷ | 7.30 | 7.30 | = | 2,244 | ÷ | 307,323,000 | |
| Feb 11, 2014 | 14.86 | = | 94.29 | ÷ | 6.35 | 6.35 | = | 1,996 | ÷ | 314,509,000 | |
| Feb 13, 2013 | 9.33 | = | 53.97 | ÷ | 5.79 | 5.79 | = | 1,888 | ÷ | 326,355,000 | |
| Feb 22, 2012 | 9.18 | = | 50.41 | ÷ | 5.49 | 5.49 | = | 1,866 | ÷ | 339,876,000 | |
| Feb 23, 2011 | 9.94 | = | 50.83 | ÷ | 5.12 | 5.12 | = | 1,840 | ÷ | 359,694,000 | |
| Feb 24, 2010 | 11.00 | = | 56.17 | ÷ | 5.10 | 5.10 | = | 1,935 | ÷ | 379,083,000 | |
| Feb 25, 2009 | 10.29 | = | 43.02 | ÷ | 4.18 | 4.18 | = | 1,672 | ÷ | 400,119,000 | |
| Feb 27, 2008 | 10.99 | = | 66.42 | ÷ | 6.05 | 6.05 | = | 2,578 | ÷ | 426,386,000 | |
| Feb 22, 2007 | 19.17 | = | 55.13 | ÷ | 2.88 | 2.88 | = | 1,283 | ÷ | 446,193,000 | |
| Mar 2, 2006 | 22.53 | = | 43.98 | ÷ | 1.95 | 1.95 | = | 871 | ÷ | 446,115,000 |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Raytheon Co. Annual Report.
The financial trajectory from 2006 to 2020 is characterized by a substantial long-term increase in both share price and earnings per share (EPS), though the valuation multiple fluctuated significantly across three distinct phases.
- Valuation Compression Phase (2006–2013)
- A consistent downward trend in the P/E ratio is observed during this period, falling from 22.53 in 2006 to a low of 9.18 by 2012. This compression occurred despite a general rise in EPS, which grew from 1.95 to 5.79. The decline in the multiple suggests that the market's willingness to pay a premium for each dollar of earnings diminished, leading to a valuation floor near 9x earnings between 2011 and 2013.
- Valuation Expansion Phase (2014–2018)
- A period of rapid valuation growth occurred starting in 2014, with the P/E ratio climbing from 14.86 to a peak of 30.30 in 2018. This expansion was driven by share price appreciation that significantly outpaced earnings growth. Notably, in 2018, the P/E reached its maximum despite a slight decrease in EPS from 7.55 to 7.02, indicating a surge in investor optimism or speculative pricing during that fiscal year.
- Normalization and Earnings Growth Phase (2019–2020)
- The valuation experienced a correction in 2019, with the P/E ratio dropping to 17.56, before stabilizing at 19.14 in 2020. During this phase, the share price remained high, supported by robust growth in fundamental earnings, as EPS reached its peak of 12.01 by February 2020. This suggests a shift where the higher stock price became more fundamentally supported by actual earnings growth rather than multiple expansion alone.
Overall, the period demonstrates a transition from a high-multiple, low-earnings environment to a high-earnings environment with a moderate valuation multiple. The most significant volatility in valuation occurred between 2017 and 2019, while the long-term growth in EPS provided the primary foundation for the increase in share price from 43.98 to 229.76.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Comparison to Competitors
Raytheon Co., P/E, long-term trends, comparison to competitors
| Raytheon Co. | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | |
|---|---|---|---|---|---|---|---|---|
| Feb 12, 2020 | 19.14 | — | 12.36 | 18.06 | — | 20.97 | 19.87 | 24.41 |
| Feb 13, 2019 | 17.56 | 21.87 | 12.42 | 15.92 | — | 16.02 | 16.88 | 19.74 |
| Feb 14, 2018 | 30.30 | 24.68 | 126.80 | 11.90 | — | 67.20 | 48.70 | 21.97 |
| Feb 15, 2017 | 20.13 | 20.50 | — | 16.96 | 32.22 | 19.29 | 14.14 | 17.55 |
| Feb 10, 2016 | 18.25 | 14.89 | 18.07 | 13.17 | — | 16.70 | 18.36 | 9.31 |
| Feb 11, 2015 | 14.67 | 19.15 | 14.01 | 18.73 | 17.17 | 19.27 | 16.86 | 17.52 |
| Feb 11, 2014 | 14.86 | 21.10 | 16.25 | 19.35 | 19.59 | 18.91 | 17.56 | 17.51 |
| Feb 13, 2013 | 9.33 | 14.71 | 11.02 | 23.99 | 17.57 | 18.78 | 10.34 | 16.07 |
| Feb 22, 2012 | 9.18 | 14.09 | 15.11 | 12.83 | 15.52 | 22.54 | 10.81 | 15.29 |
| Feb 23, 2011 | 9.94 | 16.17 | 24.14 | 19.59 | 19.49 | 22.48 | 9.58 | 17.84 |
| Feb 24, 2010 | 11.00 | 33.40 | 40.66 | 29.60 | 16.09 | 13.44 | 9.56 | 16.33 |
| Feb 25, 2009 | 10.29 | 11.63 | 4.51 | 5.65 | 6.62 | 8.71 | 8.47 | 9.57 |
| Feb 27, 2008 | 10.99 | 15.99 | 12.54 | 11.89 | 15.45 | 17.07 | 14.15 | 16.61 |
| Feb 22, 2007 | 19.17 | 32.40 | 12.28 | 12.47 | 17.11 | 18.37 | 16.95 | 18.16 |
| Mar 2, 2006 | 22.53 | 22.62 | 17.17 | 12.82 | 21.07 | 20.71 | 17.45 | 18.76 |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Sector (Capital Goods)
Raytheon Co., P/E, long-term trends, comparison to sector (capital goods)
| Raytheon Co. | Capital Goods | |
|---|---|---|
| Feb 12, 2020 | 19.14 | 39.03 |
| Feb 13, 2019 | 17.56 | 56.00 |
| Feb 14, 2018 | 30.30 | 55.16 |
| Feb 15, 2017 | 20.13 | 23.62 |
| Feb 10, 2016 | 18.25 | 33.10 |
| Feb 11, 2015 | 14.67 | 17.47 |
| Feb 11, 2014 | 14.86 | 18.85 |
| Feb 13, 2013 | 9.33 | 15.74 |
| Feb 22, 2012 | 9.18 | 15.20 |
| Feb 23, 2011 | 9.94 | 18.46 |
| Feb 24, 2010 | 11.00 | 17.22 |
| Feb 25, 2009 | 10.29 | 7.48 |
| Feb 27, 2008 | 10.99 | 15.28 |
| Feb 22, 2007 | 19.17 | 17.63 |
| Mar 2, 2006 | 22.53 | 20.11 |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Industry (Industrials)
Raytheon Co., P/E, long-term trends, comparison to industry (industrials)
| Raytheon Co. | Industrials | |
|---|---|---|
| Feb 12, 2020 | 19.14 | 43.95 |
| Feb 13, 2019 | 17.56 | 33.70 |
| Feb 14, 2018 | 30.30 | 29.83 |
| Feb 15, 2017 | 20.13 | 22.92 |
| Feb 10, 2016 | 18.25 | 22.89 |
| Feb 11, 2015 | 14.67 | 18.79 |
| Feb 11, 2014 | 14.86 | 19.13 |
| Feb 13, 2013 | 9.33 | 17.77 |
| Feb 22, 2012 | 9.18 | 15.75 |
| Feb 23, 2011 | 9.94 | 18.72 |
| Feb 24, 2010 | 11.00 | 19.17 |
| Feb 25, 2009 | 10.29 | 9.73 |
| Feb 27, 2008 | 10.99 | 16.93 |
| Feb 22, 2007 | 19.17 | 11.65 |
| Mar 2, 2006 | 22.53 | 50.62 |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).