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Raytheon Co. (RTN)


Enterprise Value to EBITDA (EV/EBITDA)

Intermediate level


Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)

Raytheon Co., EBITDA calculation

US$ in millions

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12 months ended Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Net income attributable to Raytheon Company 2,909  2,024  2,211  2,074  2,244 
Add: Net income attributable to noncontrolling interest (27) (23) (37) (7) 14 
Less: Income (loss) from discontinued operations, net of tax (1) 13  65 
Add: Income tax expense 264  1,114  857  733  790 
Earnings before tax (EBT) 3,147  3,113  3,030  2,787  2,983 
Add: Interest expense 184  205  232  233  213 
Earnings before interest and tax (EBIT) 3,331  3,318  3,262  3,020  3,196 
Add: Depreciation and amortization 568  550  515  489  439 
Earnings before interest, tax, depreciation and amortization (EBITDA) 3,899  3,868  3,777  3,509  3,635 

Based on: 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-11).

Item Description The company
EBITDA To calculate EBITDA analysts start with net earnings. To that earnings number, interest, taxes, depreciation, and amortization are added. EBITDA as a pre-interest number is a flow to all providers of capital. Raytheon Co.’s EBITDA increased from 2016 to 2017 and from 2017 to 2018.

Enterprise Value to EBITDA Ratio, Current

Raytheon Co., current EV/EBITDA calculation, comparison to benchmarks

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Selected Financial Data (US$ in millions)
Enterprise value (EV) 62,208 
Earnings before interest, tax, depreciation and amortization (EBITDA) 3,899 
Valuation Ratio
EV/EBITDA 15.95
Benchmarks
EV/EBITDA, Competitors1
Boeing Co. 14.13
General Dynamics Corp. 12.19
Lockheed Martin Corp. 15.88
Northrop Grumman Corp. 13.93
United Technologies Corp. 14.28
EV/EBITDA, Sector
Aerospace & Defense 14.36
EV/EBITDA, Industry
Industrials 16.06

Based on: 10-K (filing date: 2019-02-13).

1 Click competitor name to see calculations.

If the company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if the company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.


Enterprise Value to EBITDA Ratio, Historical

Raytheon Co., historical EV/EBITDA calculation, comparison to benchmarks

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Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 52,515  62,981  46,438  40,176  33,737 
Earnings before interest, tax, depreciation and amortization (EBITDA)2 3,899  3,868  3,777  3,509  3,635 
Valuation Ratio
EV/EBITDA3 13.47 16.28 12.29 11.45 9.28
Benchmarks
EV/EBITDA, Competitors4
Boeing Co. 16.52 16.31 12.89 8.11 10.70
General Dynamics Corp. 11.77 13.64 11.91 8.92 10.21
Lockheed Martin Corp. 12.86 15.32 12.94 12.38 9.96
Northrop Grumman Corp. 11.68 16.21 12.12 10.78 9.14
United Technologies Corp. 12.19 11.02 10.44 9.23 10.50
EV/EBITDA, Sector
Aerospace & Defense 13.58 14.50 11.96 9.83 10.19
EV/EBITDA, Industry
Industrials 15.02 15.26 13.29 11.89 11.61

Based on: 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-11).

1 See details »

2 See details »

3 2018 Calculation
EV/EBITDA = EV ÷ EBITDA
= 52,515 ÷ 3,899 = 13.47

4 Click competitor name to see calculations.

Valuation ratio Description The company
EV/EBITDA Enterprise value to earnings before interest, tax, depreciation and amortization is a valuation indicator for the overall company rather than common stock. Raytheon Co.’s EV/EBITDA ratio increased from 2016 to 2017 but then slightly decreased from 2017 to 2018 not reaching 2016 level.