RTX
RTX
$215.22
+0.39%
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, making it a critical partner to governments and airlines worldwide. The current investor narrative centers on robust defense spending tailwinds, record backlogs, and margin expansion, while also navigating challenges in the commercial aerospace supply chain and geopolitical tensions that could impact demand. Recent news highlights the company's potential to benefit from increased U.S. defense budgets and global instability, positioning RTX as a key player in the sector's growth story.…
RTX
RTX
$215.22
Related headlines
Investment Opinion: Should I buy RTX Today?
Based on the analysis, RTX is rated a Buy. The company's strong revenue growth of 8.72% YoY, improving margins, and defense spending tailwinds support a positive outlook. The analyst consensus is Buy with an average target of $229.82, implying 6.8% upside from the current price of $215.22.
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RTX 12-Month Price Forecast
The AI assessment is bullish, driven by strong growth metrics and a favorable defense environment. The forward PE of 27.55x is justified by expected earnings growth, and the low beta reduces portfolio risk. However, supply chain risks and valuation concerns warrant a medium confidence. If RTX can sustain its growth and margin expansion, the stock is likely to outperform. A downgrade would occur if revenue growth decelerates below 5% or if margins contract significantly.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on RTX's 12-month outlook, with a consensus price target around $229.82 and implied upside of +6.8% versus the current price.
Average Target
$229.82
0 analysts
Implied Upside
+6.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$180 - $265
Analyst target range
The target price range spans from a low of $180.00 to a high of $265.00, with the high target implying a 23.1% upside from the current price, suggesting that some analysts see significant potential from defense budget increases and margin expansion. The low target of $180.00 represents a 16.4% downside, possibly pricing in risks such as supply chain disruptions or geopolitical tensions. Recent institutional actions show a mix of upgrades and reiterations, with Jefferies upgrading from Hold to Buy in June 2026, while Morgan Stanley and UBS maintained their Overweight and Neutral ratings, respectively. The wide spread between low and high targets indicates moderate uncertainty, but the overall positive consensus and recent upgrades suggest a favorable outlook for RTX.
Bulls vs Bears: RTX Investment Factors
RTX presents a compelling bull case driven by strong revenue growth, defense tailwinds, and margin expansion, supported by a low beta and analyst upgrades. However, the elevated valuation and supply chain risks temper enthusiasm. The bear case centers on valuation and execution risks, but the current evidence leans bullish given the accelerating growth and favorable defense environment. The key tension is whether RTX can sustain its growth and margin improvements to justify its forward PE of 27.55x, or if supply chain issues and cost pressures will erode earnings momentum.
Bullish
- Strong Revenue Growth: Q1 2026 revenue grew 8.72% YoY to $22.076B, accelerating from prior quarters. This momentum is driven by robust defense demand and commercial aerospace recovery, supporting continued top-line expansion.
- Defense Spending Tailwinds: Record U.S. defense spending of $1.5 trillion in 2027 is expected to significantly boost RTX, with massive backlogs and strong competitive positions. Geopolitical tensions, such as Iran strikes, directly benefit defense contractors.
- Margin Expansion Potential: Operating margin improved to 11.57% in Q1 2026 from 10.02% in Q1 2025, reflecting operational efficiencies. Net margin also rose to 9.33% from 7.56%, indicating improving profitability.
- Analyst Upgrades and Buy Consensus: Jefferies upgraded RTX from Hold to Buy in June 2026, and the consensus rating is Buy with an average target of $229.82, implying 6.8% upside. This reflects growing confidence in the company's growth trajectory.
Bearish
- Elevated Valuation: Trailing PE of 36.53x is above the sector average, and forward PE of 27.55x still implies high growth expectations. If earnings fail to meet these expectations, the stock could face multiple compression.
- Supply Chain Disruptions: The commercial aerospace supply chain remains strained, with issues like engine part shortages and labor constraints. These could delay deliveries and pressure margins, as seen in past quarters.
- Geopolitical Risks: While defense spending benefits from tensions, escalation could disrupt global supply chains and increase costs. The Iran conflict has already driven up fuel costs, impacting airline customers and potentially reducing demand.
- High Debt Levels: Debt-to-equity ratio of 0.61 indicates significant leverage. Interest expenses of $406M in Q1 2026 consume a portion of operating income, limiting financial flexibility.
RTX Technical Analysis
RTX is currently in a strong uptrend, with the stock price at $215.22, up 36.59% over the past year, significantly outperforming the S&P 500's 18.19% gain. The stock is trading at 97.2% of its 52-week range (between $150.61 low and $221.34 high), indicating it is near its highs, which reflects robust momentum but also potential overextension. The 52-week low of $150.61 was set in the past year, and the current price is well above that level, suggesting strong buyer conviction and a bullish long-term trend.
Beta
0.30
0.30x market volatility
Max Drawdown
-19.3%
Largest decline past year
52-Week Range
$151-$221
Price range past year
Annual Return
+36.6%
Cumulative gain past year
| Period | RTX Return | S&P 500 |
|---|---|---|
| 1m | +12.2% | +0.3% |
| 3m | +23.7% | +4.0% |
| 6m | +7.1% | +8.3% |
| 1y | +36.6% | +20.2% |
| ytd | +14.9% | +9.6% |
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RTX Fundamental Analysis
RTX has demonstrated solid revenue growth, with the most recent quarter (Q1 2026) reporting revenue of $22.076 billion, up 8.72% year-over-year. This growth is part of a multi-quarter trend, with revenue increasing from $20.306 billion in Q1 2025 to $22.076 billion in Q1 2026, reflecting accelerating momentum. The growth is driven by strong demand across all segments, particularly Pratt & Whitney (engine sales) and Raytheon (defense systems), which are benefiting from increased defense spending and commercial aerospace recovery. The company's revenue trajectory supports a positive investment case, with expectations of continued growth in the defense sector.
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 price-to-earnings (PE) ratio is the primary valuation metric. The trailing PE is 36.53x, while the forward PE is 27.55x, indicating that the market expects significant earnings growth. The gap between trailing and forward PE suggests an expected earnings increase of approximately 32.6% over the next year, reflecting optimism about margin expansion and operational improvements. This forward-looking multiple is more reasonable and aligns with the company's growth prospects in defense and aerospace.
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
Financially, RTX carries a debt-to-equity ratio of 0.61, indicating moderate leverage. Interest expenses of $406M in Q1 2026 represent about 16% of operating income, which could strain cash flow if rates rise. The company's net margin improved to 9.33% in Q1 2026, but this is still relatively thin, and any cost overruns in fixed-price defense contracts could compress margins. Free cash flow of $8.36B TTM provides a cushion, but the payout ratio of 53% limits retained earnings for reinvestment.
FAQ
The key risks include: 1) Supply chain disruptions, which could delay deliveries and increase costs, as seen in the commercial aerospace sector. 2) Geopolitical tensions, which, while boosting defense demand, could also disrupt global supply chains and increase fuel costs. 3) High debt levels (debt-to-equity of 0.61) could strain cash flow if interest rates rise. 4) Valuation risk, as the stock trades at a premium to peers, leaving little room for error. The most severe risk is a major engine issue at Pratt & Whitney, which could lead to significant financial losses.
The 12-month forecast for RTX is positive, with a base case target of $220-$240 (50% probability), reflecting steady growth. The bull case target is $240-$265 (30% probability), driven by accelerated defense spending and margin expansion. The bear case target is $180-$200 (20% probability), if supply chain issues worsen. The most likely scenario is the base case, assuming defense spending remains elevated and commercial aerospace recovers gradually.
RTX's trailing PE of 36.53x is above the sector average, suggesting it is not cheap. However, the forward PE of 27.55x is more reasonable, reflecting expected earnings growth of 32.6%. The PEG ratio of 0.91 indicates the stock is fairly valued relative to its growth rate. Compared to its own history, the current valuation is in line with recent levels. The market is pricing in strong defense spending and margin expansion, which seems justified given the current environment.
RTX is a good buy for investors with a medium-to-long-term horizon, given its strong revenue growth of 8.72% YoY and defense tailwinds. The analyst consensus is Buy with an average target of $229.82, implying 6.8% upside. However, the stock is trading near its 52-week high, and the trailing PE of 36.53x is elevated. The main risk is supply chain disruptions, which could impact margins. For risk-tolerant investors, it's a solid addition; for conservative investors, waiting for a pullback may be prudent.
RTX is better suited for long-term investment due to its low beta (0.298) and stable defense demand. The stock has a dividend yield of 1.45%, providing income, and its growth prospects are tied to multi-year defense programs. Short-term trading is possible given the stock's momentum, but the high valuation and geopolitical sensitivity make it volatile. A minimum holding period of 3-5 years is recommended to capture the full benefit of defense spending cycles and margin improvements.