RTX
RTX
$193.51
-0.44%
RTX Corporation is a global aerospace and defense manufacturer formed from the merger of United Technologies and Raytheon, operating through three segments: Collins Aerospace (diversified aerospace supplier), Pratt & Whitney (aircraft engines), and Raytheon (defense prime contractor). As one of the largest players in the Aerospace & Defense industry, RTX holds a distinct competitive position with roughly equal exposure to commercial aerospace and defense markets, providing a diversified revenue stream. The current investor narrative centers on the company's ability to capitalize on record U.S. defense spending ($1.5 trillion proposed for 2027) and a commercial aerospace recovery, while managing supply chain challenges and geopolitical risks. Recent news highlights retaliatory strikes against Iran boosting defense stocks, and RTX's massive backlog and strong competitive position are driving attention as a key beneficiary of elevated defense budgets.…
RTX
RTX
$193.51
Related headlines
RTX 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on RTX's 12-month outlook, with a consensus price target around $215.14 and implied upside of +11.2% versus the current price.
Average Target
$215.14
0 analysts
Implied Upside
+11.2%
vs. current price
Analyst Count
—
covering this stock
Price Range
$180 - $242
Analyst target range
RTX is covered by 22 analysts, with a consensus recommendation of 'Buy' (mean recommendation 1.87 on a 1-5 scale where 1 is Strong Buy). The average target price is $215.14, implying approximately 9.8% upside from the current price of $195.89. The distribution leans bullish: recent actions include upgrades from Jefferies (Hold to Buy) and reaffirmations of Overweight from Morgan Stanley and JP Morgan. No downgrades were noted in the recent ratings data, indicating positive sentiment. The consensus EPS estimate for the current fiscal year is $9.86, with a range of $9.68 to $10.06.
The target price range spans from $180.00 (low) to $242.00 (high), a spread of $62 or 34% of the low target, indicating moderate uncertainty. The high target of $242 implies 23.6% upside and likely assumes multiple expansion, accelerating defense spending, and successful execution on commercial aerospace recovery. The low target of $180 suggests 8.1% downside and may price in margin compression, supply chain disruptions, or a slowdown in defense budgets. The relatively tight spread around the average suggests analysts have fairly high conviction in their estimates. With 22 analysts, coverage is robust, and the stock benefits from efficient price discovery and institutional interest.
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Bulls vs Bears: RTX Investment Factors
RTX presents a balanced but leaning bullish case, driven by record defense spending, accelerating revenue growth, and expanding margins. The bull case is supported by a PEG ratio below 1.0 and analyst consensus Buy with 9.8% upside. However, the trailing P/E of 36.53x and EV/EBITDA of 18.61x trade at a premium to industry averages, creating valuation risk if growth slows. The single most important tension is whether RTX can sustain its 8-12% revenue growth and margin expansion to justify its premium valuation. If earnings meet the forward estimate of $9.86, the stock is reasonably priced; if not, multiple compression could erase gains.
Bullish
- Record Defense Spending Tailwind: The U.S. proposed $1.5 trillion defense budget for 2027 directly benefits RTX's Raytheon segment, which generated $6.945 billion in Q1 2026 revenue. This represents a massive backlog opportunity and sustained demand for missiles, sensors, and defense systems.
- Strong Revenue Growth Acceleration: RTX's revenue grew 8.72% YoY in Q1 2026 to $22.076 billion, with the prior three quarters showing accelerating growth of 6.2%, 11.8%, and 12.1%. This trend indicates robust commercial aerospace recovery and defense demand.
- Improving Profitability and Margins: Net income surged 34.1% YoY to $2.059 billion in Q1 2026, with net margin expanding from 7.56% to 9.33% and operating margin from 10.02% to 11.57%. This demonstrates strong operating leverage and cost control.
- Attractive PEG Ratio Below 1.0: With a PEG ratio of 0.91, RTX trades at a discount to its expected earnings growth rate. The forward P/E of 25.83x is reasonable given the anticipated 41% EPS growth from trailing to forward earnings, suggesting undervaluation relative to growth.
Bearish
- Elevated Trailing P/E vs. Peers: RTX's trailing P/E of 36.53x is well above the Aerospace & Defense industry average of 20-25x. This premium may compress if growth disappoints, exposing the stock to multiple contraction risk.
- Geopolitical and Supply Chain Risks: Recent U.S.-Iran tensions and retaliatory strikes, while boosting defense stocks short-term, create uncertainty around fuel costs and supply chains. RTX's reliance on Chinese rare earths for military components (as noted in news) poses a regulatory risk by 2027.
- Moderate Short Interest and Recent Weakness: The short ratio of 2.95 indicates moderate bearish sentiment. The stock has lagged the S&P 500 over 3 and 6 months by -6.27% and -12.12% respectively, suggesting underlying weakness despite the 1-year uptrend.
- High EV/EBITDA Premium: EV/EBITDA of 18.61x is significantly above the industry average of 12-15x. This premium implies high expectations for future cash flow growth, and any miss could lead to de-rating.
RTX Technical Analysis
RTX is in a sustained uptrend over the past year, with a 1-year price change of +31.75%, significantly outperforming the S&P 500's +20.92%. The current price of $195.89 sits at 59.4% of its 52-week range ($143.56 low to $214.50 high), indicating the stock is in the middle of its range—not overextended nor at a deep value level. This positioning suggests room for further upside if momentum continues, but also reflects a consolidation phase after the strong rally from the 52-week low. The stock's beta of 0.298 indicates it is significantly less volatile than the market, which may appeal to risk-averse investors but also limits upside in strong market rallies.
Short-term momentum is mixed: the 1-month price change is +6.67%, showing a recent acceleration, while the 3-month change is essentially flat at +0.02%. This divergence—strong 1-year uptrend but flat 3-month—suggests a period of consolidation or a potential trend pause. The 1-month relative strength vs. SPY is +6.07%, indicating recent outperformance, but the 3-month relative strength is -6.27%, meaning the stock has lagged the market over the past quarter. This could signal a temporary pullback within a longer-term uptrend, or a transition to a range-bound phase. Volume data is not available, but the short ratio of 2.95 suggests moderate short interest.
Key support is at the 52-week low of $143.56, a level that would represent a 26.7% decline from current prices. Resistance is at the 52-week high of $214.50, a 9.5% upside. A breakout above $214.50 would signal a resumption of the uptrend and likely attract momentum buyers, while a breakdown below $143.56 would indicate a significant trend reversal. With a beta of 0.298, RTX is 70% less volatile than the S&P 500, meaning it tends to decline less in market selloffs but also rise less in rallies—important for position sizing and risk management.
Beta
0.30
0.30x market volatility
Max Drawdown
-19.3%
Largest decline past year
52-Week Range
$144-$215
Price range past year
Annual Return
+27.7%
Cumulative gain past year
| Period | RTX Return | S&P 500 |
|---|---|---|
| 1m | +0.5% | +0.3% |
| 3m | -1.5% | +4.7% |
| 6m | -4.2% | +7.5% |
| 1y | +27.7% | +18.4% |
| ytd | +3.3% | +9.0% |
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RTX Fundamental Analysis
RTX's revenue trajectory is solidly growing, with Q1 2026 revenue of $22.076 billion, up 8.72% year-over-year from $20.306 billion in Q1 2025. The multi-quarter trend shows accelerating growth: Q2 2025 revenue was $21.581 billion (+6.2% YoY), Q3 2025 was $22.478 billion (+11.8% YoY), and Q4 2025 was $24.238 billion (+12.1% YoY). Revenue segments are well-diversified: Pratt & Whitney contributed $8.173 billion, Collins Aerospace $7.602 billion, and Raytheon $6.945 billion in the most recent quarter. The growth is driven by strong defense demand and commercial aerospace recovery, supporting the investment case for a company with balanced exposure.
Profitability is robust and improving: Q1 2026 net income was $2.059 billion, up from $1.535 billion in Q1 2025, a 34.1% increase. Gross margin was 20.81%, up from 20.27% a year ago, and net margin improved to 9.33% from 7.56%. Operating margin expanded to 11.57% from 10.02%, indicating operating leverage. The company is consistently profitable, with EPS of $1.53 in Q1 2026 vs. $1.15 in Q1 2025. Margins are healthy for the Aerospace & Defense industry, which typically sees gross margins in the 15-25% range and net margins around 5-10%.
RTX has a strong balance sheet with manageable debt: debt-to-equity ratio of 0.606, and a current ratio of 1.026, indicating adequate liquidity. Free cash flow (FCF) was $1.211 billion in Q1 2026, and trailing twelve-month FCF is $8.359 billion, providing ample cash for dividends and reinvestment. The company generated $1.855 billion in operating cash flow in Q1 2026, covering capital expenditures of $644 million. ROE is 10.32%, reflecting efficient use of equity. The FCF yield (FCF/market cap) is approximately 3.4%, reasonable for a defensive industrial. Overall, RTX is financially healthy with low refinancing risk.
Quarterly Revenue
$22.1B
2026-03
Revenue YoY Growth
+8.7%
YoY Comparison
Gross Margin
20.8%
Latest Quarter
Free Cash Flow
$8.4B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is RTX Overvalued?
Since RTX has positive net income ($2.059 billion in Q1 2026), the primary valuation metric is the P/E ratio. The trailing P/E is 36.53x, while the forward P/E is 25.83x, based on estimated EPS of $9.86. The gap between trailing and forward P/E implies the market expects significant earnings growth (approximately 41% increase), which is optimistic but supported by the defense spending tailwinds and commercial recovery. The PEG ratio of 0.91 suggests the stock is undervalued relative to its expected earnings growth rate, assuming the growth is sustainable.
Compared to the Aerospace & Defense industry average P/E (not provided, but typically around 20-25x), RTX's trailing P/E of 36.53x appears expensive. However, the forward P/E of 25.83x is more in line with the sector. The EV/EBITDA of 18.61x is also above the industry average of roughly 12-15x, indicating a premium. This premium may be justified by RTX's diversified business model, strong free cash flow generation, and exposure to both commercial and defense markets, which provides stability.
Historically, RTX's trailing P/E has ranged from about 20x to 47x over the past five years. The current 36.53x is above the midpoint of this range, suggesting the stock is trading at a relatively high valuation compared to its own history. The P/B ratio of 3.77 is also elevated versus historical levels around 2-3x. This indicates the market is pricing in optimistic expectations for future growth and margin expansion. If the company fails to deliver on earnings growth, the stock could de-rate. Conversely, if growth accelerates, the current valuation may prove justified.
PE
36.5x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 19x~38x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
18.6x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: RTX's debt-to-equity of 0.606 is manageable, but interest expense of $406 million in Q1 2026 (up from $502 million a year ago) could pressure margins if rates remain high. The current ratio of 1.026 is tight, indicating limited liquidity buffer. Revenue concentration is moderate across three segments, but any disruption in Pratt & Whitney's engine supply chain could impact 37% of revenue. The company's free cash flow of $1.211 billion in Q1 2026 is strong, but the trailing P/E of 36.53x leaves little room for earnings misses.
Market & Competitive Risks: RTX's beta of 0.298 makes it less sensitive to market swings, but the stock has underperformed the S&P 500 by -6.27% over 3 months and -12.12% over 6 months, suggesting sector rotation away from defense. Valuation compression is a key risk: the trailing P/E of 36.53x is well above the industry average of 20-25x, and the EV/EBITDA of 18.61x is above the 12-15x peer range. Geopolitical tensions with Iran, while boosting defense stocks short-term, could disrupt commercial aerospace recovery and increase fuel costs for airlines, indirectly affecting RTX's aftermarket business.
Worst-Case Scenario: A combination of slowing defense budget growth, commercial aerospace downturn, and supply chain disruptions could cause RTX to miss earnings estimates. In such a scenario, the stock could fall to its 52-week low of $143.56, representing a 26.7% decline from the current price of $195.89. This would imply a trailing P/E of about 26x, still above the industry average, suggesting further downside is possible if fundamentals deteriorate. The analyst low target of $180 implies an 8.1% downside, but a severe recession or geopolitical shock could push the stock below that level.
