RTX
RTX
$224.12
+0.49%
RTX Corporation is a global aerospace and defense leader formed from the 2020 merger of United Technologies and Raytheon, operating through three primary segments: Collins Aerospace (diversified aerospace supplier), Pratt & Whitney (commercial and military aircraft engines), and Raytheon (defense prime contractor for missiles, sensors, and communications). As one of the largest defense contractors globally, RTX holds a distinct competitive position with roughly equal exposure to commercial aerospace and defense markets, underpinned by a massive installed base and deep technological moats. The current investor narrative centers on record defense backlogs and geopolitical tensions (e.g., Iran conflicts) driving defense spending, alongside a commercial aerospace recovery, which have propelled the stock to near 52-week highs. Recent news highlights record U.S. defense spending and supply shortages benefiting RTX, while the company continues to execute on its Pratt & Whitney engine aftermarket growth and Raytheon missile demand.…
RTX
RTX
$224.12
Related headlines
Investment Opinion: Should I buy RTX Today?
Rating: Buy. RTX is a high-quality aerospace and defense leader with a strong growth trajectory, supported by record backlogs and a favorable geopolitical environment. The analyst consensus is Buy with an average target of $230.68, implying ~3.3% upside, but the long-term potential is more significant.
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RTX 12-Month Price Forecast
The AI assessment is bullish, driven by strong revenue growth, a reasonable PEG ratio, and positive analyst sentiment. However, confidence is medium due to the elevated trailing P/E and geopolitical dependencies. The stock is likely to outperform if defense spending remains robust and margins hold. Key factors to watch include quarterly earnings, defense budget announcements, and Pratt & Whitney's operational performance. If revenue growth accelerates above 10% and margins expand, the stance would be upgraded to high confidence; conversely, a slowdown in defense spending or margin compression would downgrade it to neutral.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on RTX's 12-month outlook, with a consensus price target around $232.27 and implied upside of +3.6% versus the current price.
Average Target
$232.27
0 analysts
Implied Upside
+3.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$184 - $265
Analyst target range
The target price range spans from a low of $180.00 to a high of $265.00, representing a wide 47.2% spread between the low and high targets, indicating significant uncertainty about RTX's future performance. The high target of $265 implies a 18.7% upside, likely assuming continued defense spending growth and successful execution of the Pratt & Whitney aftermarket recovery, while the low target of $180 suggests a 19.4% downside, possibly pricing in margin compression or geopolitical risks. Recent ratings actions show a positive shift, with Jefferies upgrading from Hold to Buy in June 2026, and Citigroup maintaining Buy, while Morgan Stanley and UBS have held steady, indicating a generally constructive but cautious sentiment.
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Bulls vs Bears: RTX Investment Factors
RTX presents a compelling bull case driven by record defense backlogs, strong revenue growth, and a reasonable PEG ratio. However, the elevated trailing P/E and geopolitical dependencies introduce notable risks. The bull case currently has stronger evidence, given the accelerating revenue trend and positive analyst sentiment, but the key tension lies in whether the market's growth expectations are sustainable. If defense spending continues to rise and Pratt & Whitney's aftermarket recovery progresses, RTX could outperform; conversely, any margin compression or budget cuts could trigger a sharp re-rating.
Bullish
- Strong Revenue Growth: Q1 2026 revenue grew 8.7% YoY to $22.08B, with sequential acceleration from $20.31B in Q1 2025 to $24.24B in Q4 2025. This demonstrates robust demand across all segments, particularly Pratt & Whitney's aftermarket and defense.
- Record Defense Backlogs: Geopolitical tensions, including Iran conflicts, have driven record U.S. defense spending of $1.5 trillion in 2027, directly benefiting RTX. The company's Raytheon segment is a prime contractor for missiles and sensors, positioning it to capture significant growth.
- Attractive Valuation with PEG 0.91: With a PEG ratio of 0.91, RTX trades at a discount to its expected earnings growth. The forward P/E of 28.4x implies ~28.5% earnings growth, which is supported by analyst estimates of $10.33 EPS for the next year.
- Strong Technical Momentum: RTX is up 43.3% over the past year, outperforming the S&P 500's 21.5% gain. The stock is near its 52-week high of $225.65, reflecting strong investor confidence and a sustained uptrend.
Bearish
- Elevated Valuation: Trailing P/E of 36.5x is above the historical average for defense primes, suggesting the market has priced in significant growth. If earnings disappoint, the stock could face multiple compression.
- Geopolitical Risk: While tensions boost defense demand, escalation could disrupt supply chains or lead to budget reallocations. The wide analyst target range ($180-$265) reflects uncertainty about the sustainability of current defense spending levels.
- Margin Pressure: Gross margin declined from 20.3% in Q1 2025 to 20.8% in Q1 2026, but operating margin improved slightly to 11.6%. However, cost inflation and supply chain issues could pressure margins, especially in Pratt & Whitney's engine programs.
- High Debt Levels: Debt-to-equity ratio of 0.61 and interest expense of $406M in Q1 2026 indicate a significant debt burden. Rising interest rates could increase financing costs and reduce net income.
RTX Technical Analysis
RTX is in a strong sustained uptrend, with the stock up 43.3% over the past year and currently trading at $223.25, just 1.1% below its 52-week high of $225.65 and 48.2% above its 52-week low of $150.61. The price sits at 98.9% of its 52-week range, indicating the stock is near its highs, reflecting robust momentum and investor optimism, though it also raises the risk of overextension. The 1-year price change of +43.3% significantly outperforms the S&P 500's +21.5% over the same period, highlighting RTX's relative strength.
Beta
0.29
0.29x market volatility
Max Drawdown
-19.3%
Largest decline past year
52-Week Range
$151-$227
Price range past year
Annual Return
+44.7%
Cumulative gain past year
| Period | RTX Return | S&P 500 |
|---|---|---|
| 1m | +14.4% | +2.4% |
| 3m | +25.3% | +4.7% |
| 6m | +14.1% | +11.7% |
| 1y | +44.7% | +21.3% |
| ytd | +19.7% | +13.4% |
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RTX Fundamental Analysis
RTX's revenue trajectory is solidly growing, with Q1 2026 revenue of $22.08 billion, up 8.7% year-over-year from $20.31 billion in Q1 2025. The multi-quarter trend shows consistent expansion: Q2 2025 revenue was $21.58 billion, Q3 2025 $22.48 billion, and Q4 2025 $24.24 billion, indicating accelerating growth into 2026. Segment-wise, Pratt & Whitney led with $8.17 billion in revenue, followed by Collins Aerospace at $7.60 billion and Raytheon at $6.95 billion, with all segments contributing to growth, though Pratt & Whitney's engine aftermarket and military demand are key drivers.
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?
Given RTX's positive net income, the trailing P/E ratio of 36.5x is the primary valuation metric, with a forward P/E of 28.4x, implying the market expects earnings growth. The gap between trailing and forward P/E suggests an expected earnings increase of about 28.5% over the next year, reflecting optimism around margin expansion and defense demand. The PEG ratio of 0.91x indicates the stock is reasonably valued relative to its growth rate, with a PEG below 1.0 typically considered undervalued.
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 carries a debt-to-equity ratio of 0.61, with interest expenses of $406M in Q1 2026, which could strain cash flows if rates rise. The company's net margin of 7.6% is relatively thin, leaving limited buffer for cost overruns. Revenue concentration in defense (~50%) and commercial aerospace creates cyclicality, with Q2 2024 showing a sharp EPS drop to $0.08 due to charges, highlighting earnings volatility. Free cash flow of $8.36B TTM is positive, but capital-intensive engine programs require sustained investment.
FAQ
The key risks are: 1) Financial risk: high debt-to-equity of 0.61 and interest expenses of $406M, which could strain cash flows if rates rise. 2) Competitive risk: intense competition in defense from Lockheed Martin and Northrop Grumman, and in commercial aerospace from GE and Rolls-Royce. 3) Macro risk: geopolitical tensions could escalate, disrupting supply chains, or de-escalate, reducing defense demand. 4) Company-specific risk: Pratt & Whitney engine issues could lead to higher costs and reputational damage. The most severe risk is a defense budget cut, which could significantly impact revenue and earnings.
The 12-month forecast is moderately bullish. In the base case (50% probability), the stock is expected to trade in the $220-$240 range, with an average target of $230.68. In the bull case (30% probability), it could reach $240-$265, driven by accelerated defense spending and strong aftermarket growth. In the bear case (20% probability), it could fall to $180-$200 if defense spending slows or operational issues arise. The most likely scenario is the base case, assuming continued moderate growth and stable margins. Investors should monitor quarterly earnings and defense budget announcements for signs of deviation.
RTX is fairly valued relative to its growth, with a PEG ratio of 0.91, which is below 1.0, suggesting it is slightly undervalued. The trailing P/E of 36.5x is higher than the sector average, but the forward P/E of 28.4x indicates expected earnings growth. Compared to its own history, the stock trades at a premium, but this is justified by the strong defense and commercial outlook. The market is pricing in continued growth, and if RTX meets analyst EPS estimates of $10.33, the valuation is reasonable. Overall, it is not a bargain, but it is not overvalued given the growth trajectory.
RTX is a good buy for investors seeking a balanced aerospace and defense play with strong growth prospects. The stock trades at a forward P/E of 28.4x, with a PEG of 0.91, indicating reasonable valuation relative to expected earnings growth of ~28.5%. Analyst consensus is Buy with an average target of $230.68, implying ~3.3% upside. However, the stock is near its 52-week high, so there is limited short-term upside, and the main downside risk is a slowdown in defense spending. For long-term investors, the record backlogs and commercial recovery provide a solid foundation, making it a good buy on any pullback.
RTX is more suitable for long-term investment due to its cyclical nature and the long duration of defense contracts. The stock has a beta of 0.29, indicating low volatility, but it is still subject to sector cycles. Over the past year, it has gained 43.3%, but short-term trading could be risky given the stock is near its 52-week high. For long-term investors, the record backlogs and commercial aerospace recovery provide multi-year growth potential, making a holding period of at least 3-5 years advisable. The dividend yield of 1.45% adds to total returns, but the primary value is in capital appreciation.