RTX - Raytheon: Dividends And Buybacks Raised After Q1 Buy Case On Track

• Raytheon shares are up 1.8% today after Q1 results; shares have gained  30%+ since our initiation last May, but remain attractive in our view.
• Defense segments have remained resilient, while Aerospace segments have seen EBIT gradually recover; the synergies target was raised.
• There are signs of improvement in the commercial aftermarket; while the near term is uncertain, a full recovery by 2023 is very likely.
• Q1 results gave management the confidence to move up the low end of the 2021 outlook, raise the dividend by 7% and expand buybacks.
• With shares at $82.50, we expect an exit price of $104 and a total return of 42% (10.6% annualized). The Dividend Yield is 2.5%. Buy.

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