RTX
RTX
$197.68
-0.22%
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 unique position as a prime contractor for missiles, sensors, and communications technology, while also being a leading engine and aerospace systems provider. The current investor narrative centers on RTX's record $289 billion backlog, which signals robust future revenue visibility, but also raises questions about execution and margin expansion as the company navigates supply chain challenges and geopolitical tensions that are driving increased defense spending.…
RTX
RTX
$197.68
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Investment Opinion: Should I buy RTX Today?
Based on the analysis, RTX is rated a Buy. The company's record $289 billion backlog, 8.7% YoY revenue growth, and improving margins provide a strong foundation for future earnings growth. The consensus analyst target of $234.82 implies a 17% upside from the current price of $200.79, and the low beta of 0.287 makes it a suitable defensive addition to a portfolio.
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RTX 12-Month Price Forecast
The AI assessment leans bullish on RTX, driven by its robust backlog and growth trajectory, which support the premium valuation. The consensus Buy rating and average target upside of 17% reinforce this view. However, confidence is medium due to execution risks and recent price volatility. The stance would be upgraded to high confidence if RTX delivers a strong Q2 earnings report with raised guidance, while a downgrade would occur if margins contract or backlog conversion slows.
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 +18.8% versus the current price.
Average Target
$234.82
0 analysts
Implied Upside
+18.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$200 - $265
Analyst target range
The target price range spans from a low of $200.00 to a high of $265.00, with the low end near the current price, suggesting limited downside risk according to the most bearish analyst. The high target of $265 implies a 32% upside, likely assuming successful execution on the backlog, margin expansion, and continued defense spending growth. The spread between low and high targets is $65, or about 32% of the average target, indicating moderate uncertainty. The recent upgrade by Jefferies and consistent Buy ratings from major banks like Citigroup and JP Morgan suggest a positive bias, with the consensus leaning bullish. This wide range reflects the market's debate on RTX's ability to convert its massive backlog into profitable growth, with the low target potentially pricing in margin compression or supply chain disruptions, while the high target assumes robust execution and favorable geopolitical conditions.
Bulls vs Bears: RTX Investment Factors
RTX presents a balanced investment case with strong tailwinds from its record $289 billion backlog and solid revenue growth of 8.7% YoY, supported by a consensus Buy rating and an average analyst target of $234.82, implying 17% upside. However, the stock's elevated valuation (forward PE 25.6x) and execution risks on converting backlog to profit, along with recent price volatility, introduce significant uncertainties. The bull case currently has stronger evidence, given the backlog visibility and improving margins, but the key tension lies in whether RTX can execute on its backlog without margin erosion, which would justify the premium valuation. If execution falters, the stock could face de-rating, making this the most critical factor to monitor.
Bullish
- Record $289B Backlog: RTX's $289 billion backlog provides exceptional multi-year revenue visibility, underpinning future growth across all three segments. This is a key differentiator in the aerospace and defense industry, reducing earnings uncertainty and supporting the company's growth outlook.
- Strong Revenue Growth: Q1 2026 revenue grew 8.7% YoY to $22.08 billion, with sequential growth from Q4 2025's $24.24 billion. This consistent growth, driven by both commercial aerospace recovery and defense demand, demonstrates the company's ability to execute on its backlog.
- Analyst Consensus Buy: With 22 analysts, the consensus rating is 'Buy' with a mean recommendation of 1.87 (where 1 is Strong Buy). The average target price of $234.82 implies a 17% upside from the current price of $200.79, indicating broad optimism about RTX's prospects.
- Low Beta Defensive Qualities: RTX's beta of 0.287 indicates significantly lower volatility than the broader market, making it a defensive holding. This is attractive for risk-averse investors, especially during periods of market turbulence, as the stock tends to be more stable.
Bearish
- Elevated Valuation: RTX trades at a trailing PE of 36.5x and a forward PE of 25.6x, which is a premium to the broader market. The PEG ratio of 0.91 suggests the stock is fairly valued relative to growth, but the high absolute PE leaves little room for error.
- Execution Risk on Backlog: Converting the $289 billion backlog into profitable revenue is not guaranteed. Supply chain disruptions, labor shortages, or cost overruns could compress margins and delay deliveries, as seen in the past with Pratt & Whitney's geared turbofan engine issues.
- Recent Price Volatility: Despite a low beta, RTX's stock has experienced significant volatility, with a 1-month decline of -9.68% and a 6-month decline of -4.28%. The stock recently dropped from a high of $226.88 to $200.79, indicating potential near-term weakness.
- High Debt Levels: RTX has a debt-to-equity ratio of 0.61, which is moderate but still significant. Interest expenses of $406 million in Q1 2026 represent a drag on earnings, and rising interest rates could increase borrowing costs, impacting profitability.
RTX Technical Analysis
RTX's stock has demonstrated a strong long-term uptrend, with a 1-year price change of +26.54%, significantly outperforming the S&P 500's +18.65% over the same period. The current price of $200.79 sits at approximately 88.5% of the 52-week range (between $150.61 low and $226.88 high), indicating the stock is trading closer to its highs, which suggests positive momentum but also potential overextension. The stock's beta of 0.287 indicates it is significantly less volatile than the broader market, making it a defensive holding in a portfolio.
Beta
0.29
0.29x market volatility
Max Drawdown
-19.3%
Largest decline past year
52-Week Range
$156-$227
Price range past year
Annual Return
+25.4%
Cumulative gain past year
| Period | RTX Return | S&P 500 |
|---|---|---|
| 1m | -11.3% | -1.1% |
| 3m | +7.7% | +3.0% |
| 6m | -3.3% | +15.4% |
| 1y | +25.4% | +16.2% |
| ytd | +5.6% | +12.1% |
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RTX Fundamental Analysis
RTX's revenue trajectory shows steady growth, with Q1 2026 revenue of $22.08 billion, up 8.7% year-over-year, and sequential growth from Q4 2025's $24.24 billion. The company's revenue segments are well-diversified, with Pratt & Whitney contributing $8.17 billion, Collins Aerospace $7.60 billion, and Raytheon $6.95 billion in the most recent quarter. This balanced mix across commercial and defense markets provides resilience, though the commercial aerospace recovery and defense spending increases are key growth drivers. The 8.7% YoY growth rate is consistent with the aerospace and defense industry's mid-single-digit to low-double-digit growth expectations, and the company's massive $289 billion backlog provides strong revenue visibility for years to come.
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 PE ratio is the primary valuation metric. The trailing PE is 36.53x, while the forward PE is 25.56x, indicating the market expects significant earnings growth. The gap between trailing and forward PE suggests an anticipated earnings increase of approximately 43%, which aligns with the company's backlog-driven growth outlook. This is a substantial growth expectation, and the market is pricing in improved profitability as RTX executes on its record backlog and benefits from defense spending tailwinds.
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 moderate debt load with a debt-to-equity ratio of 0.61, and interest expenses of $406 million in Q1 2026, which could pressure earnings if rates rise. The company's net margin of 7.6% is relatively thin, and any cost overruns on fixed-price defense contracts could compress margins further. Additionally, the company's free cash flow of $8.36 billion TTM is positive but may be insufficient to cover dividend payments and debt obligations if cash generation slows. Revenue concentration is diversified across three segments, but Pratt & Whitney's engine issues have historically caused volatility, and any recurrence could impact earnings.
FAQ
The key risks for RTX include: 1) Execution risk on its $289 billion backlog, as supply chain issues or cost overruns could compress margins. 2) Defense spending cuts, as a significant portion of revenue depends on government contracts. 3) Commercial aerospace cyclicality, with a downturn in air travel impacting Pratt & Whitney and Collins Aerospace. 4) High debt levels, with a debt-to-equity ratio of 0.61, which could strain finances if interest rates rise. The most severe risk is a combination of these factors leading to a de-rating of the stock, potentially causing a decline of 15-20% from current levels.
The 12-month forecast for RTX is moderately bullish, with a base case probability of 50% targeting a price range of $210-$235, aligning with the average analyst target of $234.82. The bull case, with a 30% probability, targets $235-$265, driven by strong execution and defense tailwinds. The bear case, with a 20% probability, targets $170-$200, reflecting execution failures or macro headwinds. The most likely scenario is the base case, where RTX delivers steady growth and the stock appreciates modestly from current levels.
RTX is trading at a forward PE of 25.6x, which is a premium to the broader market and its own historical average. The PEG ratio of 0.91 suggests the stock is fairly valued relative to its expected earnings growth of ~43%. Compared to peers, RTX's valuation is in line with the aerospace and defense sector, but the market is pricing in significant growth from its backlog. The stock appears fairly valued, not overvalued, given its growth prospects and defensive characteristics. However, if execution falters, the premium could compress, making it look expensive in hindsight.
RTX is a good buy for investors seeking a defensive growth stock with a strong backlog and positive analyst sentiment. The consensus rating is Buy, with an average target price of $234.82, implying a 17% upside from the current price of $200.79. However, the stock is not cheap, trading at a forward PE of 25.6x, so investors should be prepared for potential volatility. The biggest downside risk is execution on its $289 billion backlog, which could lead to margin compression and a de-rating. For long-term investors with a 3-5 year horizon, RTX offers a compelling risk/reward, but it may not be suitable for short-term traders seeking quick gains.
RTX is more suitable for long-term investment due to its low beta (0.287), which indicates lower volatility, and its multi-year backlog providing revenue visibility. Short-term trading is possible, but the stock's recent 1-month decline of -9.68% shows it can be subject to market swings. For long-term investors, a minimum holding period of 3-5 years is recommended to allow the backlog to convert into earnings and for the stock to realize its growth potential. The company's dividend yield of 1.45% also provides a modest income stream, making it attractive for income-focused investors.