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Raytheon Co. (NYSE: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, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net income attributable to Raytheon Company 3,343  2,909  2,024  2,211  2,074 
Add: Net income attributable to noncontrolling interest (14) (27) (23) (37) (7)
Less: Income (loss) from discontinued operations, net of tax (1) 13 
Add: Income tax expense 658  264  1,114  857  733 
Earnings before tax (EBT) 3,986  3,147  3,113  3,030  2,787 
Add: Interest expense 180  184  205  232  233 
Earnings before interest and tax (EBIT) 4,166  3,331  3,318  3,262  3,020 
Add: Depreciation and amortization 605  568  550  515  489 
Earnings before interest, tax, depreciation and amortization (EBITDA) 4,771  3,899  3,868  3,777  3,509 

Based on: 10-K (filing date: 2020-02-12), 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).

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 2017 to 2018 and from 2018 to 2019.

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) 33,034 
Earnings before interest, tax, depreciation and amortization (EBITDA) 4,771 
Valuation Ratio
EV/EBITDA 6.92
Benchmarks
EV/EBITDA, Competitors1
Boeing Co. 140.43
General Dynamics Corp. 9.08
Lockheed Martin Corp. 12.26
Northrop Grumman Corp. 16.17
Raytheon Technologies Corp. 6.43
EV/EBITDA, Sector
Aerospace & Defense 12.47
EV/EBITDA, Industry
Industrials 11.65

Based on: 10-K (filing date: 2020-02-12).

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, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 64,443  52,515  62,981  46,438  40,176 
Earnings before interest, tax, depreciation and amortization (EBITDA)2 4,771  3,899  3,868  3,777  3,509 
Valuation Ratio
EV/EBITDA3 13.51 13.47 16.28 12.29 11.45
Benchmarks
EV/EBITDA, Competitors4
Boeing Co. 284.02 16.52 16.31 12.89 8.11
General Dynamics Corp. 11.81 11.77 13.64 11.91 8.92
Lockheed Martin Corp. 14.86 12.86 15.32 12.94 12.38
Northrop Grumman Corp. 18.60 11.68 16.21 12.12 10.78
Raytheon Technologies Corp. 12.60 12.19 11.02 10.44 9.23
EV/EBITDA, Sector
Aerospace & Defense 19.50 13.59 14.32 11.92 9.65
EV/EBITDA, Industry
Industrials 15.33 15.07 15.23 13.32 11.91

Based on: 10-K (filing date: 2020-02-12), 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).

1 See details »

2 See details »

3 2019 Calculation
EV/EBITDA = EV ÷ EBITDA
= 64,443 ÷ 4,771 = 13.51

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 decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.