Zacks Investment Research downgraded shares of Raytheon Company (RTN) from OUTPERFORM to NEUTRAL on August 17, 2012, with a target price of $59.00.
Raytheon is one of the best-positioned companies among the large-cap defense players because of its non-platform-centric focus. Looking forward, the company enjoys strong order bookings and order backlog, an improving balance sheet, growing cash flow, operational improvements and an above industry average ROE. Future growth will be driven by its focus on ISR unmanned systems, training, cyber security, Standard Missile-6, Patriot, Zumwalt and THAAD. This is, however, offset by apprehensions over the future growth of the U.S. defense budget, the fate of high-cost programs, risks related to key project executions and order cancellations. Thus in the absence of any positive triggers, we have downgraded our recommendation on Raytheon to Neutral from Outperform.
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