By Sam Boughedda
Raytheon Technologies (NYSE:RTX) shares jumped at the start of Tuesday's session after the aerospace and defense company announced it has authorized a $6 billion share repurchase program.
The company said the new authorization replaces the company's previous program, which was approved last year on December 7, 2021.
Reacting to the news, Jefferies analysts said the new program compares to the $6B authorization approved last year.
"As of Q3:22, $3.5BB of repurchases were left on the prior authorization, which compares to $2.4BB repurchased YTD in 2022. The company guided to at least $2.5BB of shares repurchased in 2022E and $3.0BB in 2023," wrote the analysts. "Since 2020, RTX has repurchased $6.8BB of shares as of Q3:22, driving the average diluted share count down 47.8MM shares from 1,525MM at MoE close."
The analysts, who maintained a Buy rating and $100 per share price target on the stock, added: "RTX has set a target to return $20BB+ of capital to shareholders in the first four years following MoE close (Apr 2020). To date, the company has returned $14.8BB to shareholders through the dividend ($8.8BB or 105% of FCF) and share repurchase ($6.0BB or 71% of FCF). This implies an incremental $5.2BB returned to shareholders through Q1:24 with our estimate incorporating upside to the target with $7.3BB deployed during Q4:22 and 2023."
Raytheon shares opened up the session at $101.57. However, they have since declined, now at $100.16 per share, up 0.58% on the day.