Should You Invest in Raytheon Technologies?

PHOTO CREDIT: Raytheon Technologies

OVERVIEW

Raytheon Technologies Corporation is a company based in the United States. The company designs, manufactures, and sells aerospace and defense products around the world. The company manufactures airplane engines, missiles, defense systems, other airplane parts, and many others. The company operates under the Raytheon, Pratt and Whitney, and many others. The company was founded in 1922.

Why You Should?

  1. Raytheon Technologies is a great reopening play in an investor’s portfolio. The company has a lot of exposure to the commercial aerospace sector as they produce everything from airplane lavatories to airplane engines. Once this pandemic is over, the company will see rising orders for these products as demand returns once again.
  2. Biden recently released his infrastructure plans for the nation. The administration wants to spend a lot of money (more than the Trump administration) on defense spending. As this spending will continue to rise, investors can expect the company to get more contracts for its defense products. This will benefit the company and its investors.
  3. The Biden administration will look to continue to mend and maintain strong ties with its allies. Because of this, Biden will continue to sign deals with these other countries. This will allow other countries to order more defense products from American firms like Raytheon Technologies. This will benefit the company and its investors.
  4. Raytheon Technologies designs and sells a wide range of products. After its merger with United Technologies, the company made a wide variety of defense products as well as other commercial aerospace products (airplane engines, lavatories, etc.) This wide range of products and services will benefit the company and its investors.
  5. The company has seen rising revenues and profits over the past couple of financial years due to the reasons mentioned above. This has helped the company grow across all of its markets and product offerings. This has also benefited the company’s investors. In the financial year of 2020, the company reported revenues of around 56.59 billion and a loss of around 3.52 billion. This loss was tied to merger costs between Raytheon and United Technologies. In the financial year of 2019, the company reported lower revenues of around 45.35 billion and profits of around 5.54 billion.
PHOTO CREDIT: Yahoo Finance

Why You Should Not?

  1. Raytheon Technologies faces tough competition from many other large defense and aerospace firms. Some of these companies include Lockheed Martin, Northrop Grumman, General Electric, and many others. This competition might hurt the company and its investors.
  2. The COVID-19 Pandemic has hurt the company’s business as the demand for commercial aerospace products fell as airlines did not want to buy any products during the downturn. This hurt the company and its investors. This demand will slowly return but might hurt the company and its investors in the short to mid-term.

MY OPINION

I think that Raytheon Technologies is a decent long-term investment due to its position as a good reopening play, a large infrastructure deal, positive impacts under a Biden administration, a wide range of products, as well as rising revenues. However, tough competition and negative impacts from the pandemic might hurt the company and its investors.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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