Raytheon Technologies Corp. (NYSE:RTX) and Lockheed Martin (NYSE:LMT) have continued to gain as defense spending increases. Raytheon is trading at a valuation of $103.37. Yesterday, the stock opened at $100.64, leaving this as the day’s lowest.
The highest price was $104.45. The earlier analysis projected that Raytheon would likely face resistance at $100, and if it broke through, then it would rally to find a new high. The price target is $125.
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Lockheed Martin is trading at $469. The valuation is above a previously identified resistance level of $441. Consistent with our analysis, Lockheed Martin is on the path to finding a new high, with potential resistance at $500. The price may, however, appreciate to about $520 before pulling back to consolidate.
Raytheon Technologies offers higher returns for a lower price
Since May 2019, Raytheon has returned 42.39% to the shareholders. Lockheed Martin returned 33.30% over the same period. Analysis of the RSI shows Lockheed may slide lower soon. At 70.21, it shows that Lockheed Martin is overbought. Some investors, especially retail investors, are likely to start selling the stock.
This would establish some resistance at $470. However, the sell-off would be short-lived and have little impact on valuation. Institutional investors are likely to accumulate on any decline.
For Raytheon, the RSI of 65 indicates that the stock still has some room for acceleration before investors can re-evaluate portfolio strategy. This analysis considers that investors will utilize this opportunity to drive the share price higher. Comparatively, therefore, this analysis finds a better opportunity in Raytheon Technologies.
Summary
Both Raytheon and Lockheed Martin are on bullish momentum with a promise for positive returns. Investing in both businesses is recommended. If one has to choose between the two, Raytheon Technologies is the best buy.
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