Wall Street loves Raytheon. The company’s stock is selling at a premium to that of its rivals in the defense sector, and consensus estimates on forward earnings are rosy despite the drumbeat of bad news out of the Pentagon. Raytheon’s popularity can be traced to several factors. First, its fate is not tied to a handful of expensive weapons platforms. Second, its top executives have a clear strategy focusing on shareholder value. Third, its heavy international exposure is a hedge against unpleasant surprises from the Pentagon. And fourth, CEO William Swanson runs a button-down culture that avoids political controversy, so investors focus on Raytheon’s numbers — which are quite impressive. I have written a commentary for Forbes that you can read here.
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