RTX
RTX
$205.16
-1.24%
RTX Corporation is a global aerospace and defense manufacturer formed from the merger of United Technologies and Raytheon, operating through three primary segments: Collins Aerospace, Pratt & Whitney, and Raytheon. As a diversified supplier to both commercial aerospace and defense markets, RTX holds a leading position in aircraft engines, avionics, and missile systems. The current investor narrative centers on the company's massive $289 billion backlog, which provides strong revenue visibility, while investors debate the pace of margin expansion and execution across its commercial and defense portfolios. Recent headlines highlight record defense spending and supply shortages that could benefit RTX, but also emphasize the critical need for margin improvement and operational efficiency.…
RTX
RTX
$205.16
Related headlines
Investment Opinion: Should I buy RTX Today?
Based on the analysis, RTX is rated a Buy. The thesis is that RTX's massive backlog and accelerating revenue growth, combined with a reasonable forward PE of 26.9x and a PEG of 0.91, offer a favorable risk/reward. The analyst consensus of Buy with an average target of $234.82 supports this view, implying 10.9% upside.
Sign up to view all
RTX 12-Month Price Forecast
The AI assessment is bullish with medium confidence. RTX's strong backlog, accelerating revenue, and reasonable valuation relative to growth support a positive outlook. However, the medium confidence reflects execution risks and margin pressures. If RTX can deliver on margin expansion and maintain growth, the stock could re-rate higher. Key developments to watch include quarterly earnings, margin trends, and backlog conversion. A downgrade to neutral would occur if margins stagnate or revenue growth decelerates below 5%.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on RTX's 12-month outlook, with a consensus price target around $234.82 and implied upside of +14.5% versus the current price.
Average Target
$234.82
0 analysts
Implied Upside
+14.5%
vs. current price
Analyst Count
—
covering this stock
Price Range
$200 - $265
Analyst target range
The target price range spans from a low of $200 to a high of $265, representing a wide spread of $65, which indicates moderate uncertainty about the stock's future performance. The low target of $200 suggests a potential downside of 5.5% from the current price, possibly pricing in margin compression or execution risks. The high target of $265 implies an upside of 25.2%, likely assuming accelerating growth and successful margin expansion. The recent upgrade from Jefferies and consistent Buy ratings from Citigroup and Morgan Stanley suggest a positive sentiment shift, though the presence of Neutral ratings from UBS indicates some caution.
Drowning in data?
Find the real signal!
Bulls vs Bears: RTX Investment Factors
RTX presents a balanced bull-bear case. The bull side is supported by a record $289B backlog, accelerating revenue growth, and a reasonable PEG ratio, while the bear side highlights a high trailing PE, thin margins, and execution risks. Currently, the bull case has slightly stronger evidence given the backlog visibility and analyst consensus, but the key tension lies in margin expansion: if RTX can improve operating margins from the current 10.5% toward its long-term targets, the stock could re-rate higher; if not, the premium valuation may compress. The single most important factor is whether Pratt & Whitney's engine issues are fully resolved and margins expand as expected.
Bullish
- Record $289B backlog: RTX's $289 billion backlog provides multi-year revenue visibility, with Q1 2026 revenue up 8.7% YoY to $22.08B. This backlog, driven by strong defense spending and commercial aftermarket demand, underpins sustained growth and reduces earnings uncertainty.
- Accelerating revenue growth: Q1 2026 revenue of $22.08B grew 8.7% YoY, up from $20.31B in Q1 2025. Sequential growth from Q4 2025's $24.24B indicates momentum, with Pratt & Whitney leading at $8.17B in segment revenue.
- Attractive PEG ratio of 0.91: With a PEG of 0.91, RTX trades at a reasonable price relative to its expected earnings growth. The forward PE of 26.9x implies ~36% earnings growth, which, if realized, supports the current valuation.
- Strong analyst consensus Buy: 22 analysts rate RTX a Buy with an average target of $234.82, implying 10.9% upside from $211.71. Recent upgrades from Jefferies and consistent Buy ratings from Citigroup and Morgan Stanley reflect positive sentiment.
Bearish
- High trailing PE of 36.5x: The trailing PE of 36.5x is elevated relative to the broader market and RTX's own history. This premium pricing leaves little room for error; any earnings miss could trigger multiple compression.
- Thin gross margin of 20.1%: Gross margin of 20.1% is modest for an industrial, and Q1 2026's 20.8% shows only slight improvement. Cost pressures in Pratt & Whitney's geared turbofan engine program could further squeeze margins.
- Execution risk on backlog: Converting the $289B backlog into profitable revenue requires flawless execution. Delays or cost overruns in defense contracts or commercial engine programs could erode margins and hurt cash flow.
- Modest dividend yield of 1.45%: With a dividend yield of 1.45%, RTX offers limited income, which may not attract income-focused investors. The payout ratio of 53% suggests room for growth but also limits capital return flexibility.
RTX Technical Analysis
RTX is in a strong uptrend, with the stock up 31.8% over the past year, significantly outperforming the S&P 500's 18.6% gain. The current price of $211.71 sits near the upper end of its 52-week range, at approximately 93% of the high of $226.88 and 41% above the low of $150.61. This positioning near the highs suggests strong momentum, though it also raises the risk of overextension, especially given the stock's low beta of 0.29, which indicates lower volatility than the market.
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
+29.4%
Cumulative gain past year
| Period | RTX Return | S&P 500 |
|---|---|---|
| 1m | -4.7% | +2.0% |
| 3m | +18.9% | +1.0% |
| 6m | +0.6% | +11.8% |
| 1y | +29.4% | +18.1% |
| ytd | +9.6% | +11.7% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
RTX Fundamental Analysis
RTX's revenue growth is accelerating, with Q1 2026 revenue of $22.08 billion, up 8.7% year-over-year, and a sequential increase from $20.31 billion in Q1 2025. The company's three segments—Collins Aerospace ($7.60B), Raytheon Intelligence & Space ($6.95B), and Pratt & Whitney ($8.17B)—show balanced growth, with Pratt & Whitney leading. This growth is driven by strong commercial aftermarket demand and defense spending, supported by a record $289 billion backlog, which provides multi-year revenue visibility.
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
Open an Account, get $2 TSLA now!
Valuation Analysis: Is RTX Overvalued?
Given RTX's positive net income, the PE ratio is the primary valuation metric. The trailing PE is 36.5x, while the forward PE is 26.9x, indicating that the market expects significant earnings growth. The PEG ratio of 0.91 suggests the stock is reasonably priced relative to its growth rate, which is attractive for a defense prime. The gap between trailing and forward PE implies an expected earnings growth of approximately 36% over the next year, driven by margin expansion and backlog conversion.
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 and operational risks include RTX's debt-to-equity ratio of 0.61, which is manageable but not negligible, and interest expenses of $406M in Q1 2026. The company's operating margin of 10.5% is thin for its scale, and gross margin of 20.1% leaves limited buffer for cost overruns. Free cash flow of $8.36B TTM is positive, but the payout ratio of 53% indicates that a significant portion is returned to shareholders, limiting reinvestment flexibility. Revenue concentration in commercial aerospace and defense exposes RTX to cyclicality in air travel and government budget fluctuations.
FAQ
The key risks include margin compression from Pratt & Whitney's engine issues, execution risk on the $289B backlog, potential defense budget cuts, and a high trailing PE that could lead to multiple compression. Additionally, the low beta of 0.29 means the stock may underperform in strong bull markets. The most severe risk is a -28.9% decline to the 52-week low of $150.61 if execution falters.
The 12-month forecast is positive, with a base case target of $234.82 (10.9% upside) and a bull case target of $265 (25.2% upside). The bear case target is $200 (-5.5% downside). The base case has a 50% probability, assuming steady growth and margin expansion. The most likely scenario is the base case, driven by the strong backlog and defense spending.
RTX is fairly valued relative to its growth prospects. The forward PE of 26.9x is reasonable given the expected 36% earnings growth, and the PEG ratio of 0.91 suggests it is undervalued relative to its growth rate. However, the trailing PE of 36.5x is above the market average, indicating that the market is pricing in significant future growth. Compared to peers, RTX trades at a slight premium, but this is justified by its backlog and diversification.
RTX is a good buy for investors seeking a defensive growth stock with a strong backlog and reasonable valuation. The analyst consensus is Buy with an average target of $234.82, implying 10.9% upside. However, the trailing PE of 36.5x is high, and the stock could be volatile in the short term. It is a good buy for long-term investors who can tolerate some execution risk, but not for those seeking quick gains.
RTX is more suitable for long-term investment due to its low beta of 0.29 and multi-year backlog visibility. The stock has a dividend yield of 1.45%, providing some income, and its growth prospects are best realized over a 3-5 year horizon. Short-term trading is possible, but the stock's low volatility may limit quick gains. A minimum holding period of 3 years is recommended to capture the full benefit of backlog conversion and margin expansion.