RTX Corporation
RTX
$196.21
+0.77%
RTX Corporation is a major aerospace and defense manufacturer operating across commercial and military markets. It is a diversified industrial leader formed from the merger of United Technologies and Raytheon, with core advantages in aircraft engines, aerospace systems, and defense technology.…
RTX
RTX Corporation
$196.21
Investment Opinion: Should I buy RTX Today?
Based on a synthesis of the technical, fundamental, and sentiment data, the objective assessment for RTX is a Hold. The stock's strong fundamental backdrop and positive analyst sentiment are counterbalanced by its premium valuation following a significant rally. The current price near the upper end of its 52-week range suggests much of the near-term optimism is already priced in. Investors should await a more attractive entry point or clearer evidence of sustained margin expansion before establishing new positions.
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RTX 12-Month Price Forecast
The data supports a neutral stance. The strong fundamental tailwind is real, but the stock's significant rally and high absolute multiples suggest the risk/reward is balanced at the current price. Confidence is medium due to the high dependency on external (geopolitical) factors.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on RTX Corporation's 12-month outlook, with a consensus price target around $255.07 and implied upside of +30.0% versus the current price.
Average Target
$255.07
8 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
8
covering this stock
Price Range
$157 - $255
Analyst target range
Wall Street analysts have provided earnings and revenue estimates for the company. The consensus EPS estimate is $9.20, with a range from $9.00 to $9.41. The consensus revenue estimate is $116.02 billion. Recent institutional ratings from firms like Citigroup, JP Morgan, and RBC Capital are predominantly positive (Buy/Overweight/Outperform), with UBS maintaining a Neutral stance. No specific consensus target price was provided in the data inputs.
Bulls vs Bears: RTX Investment Factors
RTX presents a compelling but nuanced investment case. Strong secular tailwinds from defense spending and solid financials are balanced against a premium valuation and reliance on continued geopolitical support. The stock's recent outperformance reflects optimism, but leaves limited margin for error.
Bullish
- Strong Defense Budget Tailwinds: Geopolitical tensions and proposed budget increases signal multi-year growth for defense contractors.
- Robust Revenue Growth: Q4 2025 revenue grew 12.1% YoY, demonstrating strong underlying demand.
- Solid Free Cash Flow: TTM FCF of $7.94B provides financial flexibility for dividends and investment.
- Reasonable PEG Ratio: Forward PEG of 0.91 suggests valuation is aligned with expected growth.
Bearish
- Elevated Valuation Multiples: Trailing P/E of 36.5 and EV/EBITDA of 21.6 are high, pricing in significant growth.
- Earnings Margin Pressure: Q4 net margin of 6.7% declined from 8.5% in Q3, showing quarterly volatility.
- Near 52-Week High: Current price is ~10% below 52-week high, limiting near-term upside potential.
- Modest Dividend Yield: Dividend yield of 1.45% is low for income-focused investors.
RTX Technical Analysis
Overall Assessment: The stock has exhibited a strong uptrend over the past six months, rising 15.77% from its price of around $166.63 in early October 2025 to $192.90 as of March 31, 2026. This performance significantly outpaces the broader market, as evidenced by a 6-month relative strength of 18.59. Short-term Performance: Over the last three months, the stock has gained 5.18%, again outperforming the market which declined 4.63%. However, the stock declined 4.80% over the past month, though this still represents a relative outperformance (relative strength of 0.45) against a market that fell 5.25%. Current Position: The current price of $192.90 sits near the upper end of its 52-week range of $112.27 to $214.50, approximately 10% below its 52-week high. The price data shows volatility, with a sharp rally in late October 2025 followed by consolidation and another surge in early 2026, before a recent pullback from highs above $210.
Beta
0.41
0.41x market volatility
Max Drawdown
-16.1%
Largest decline past year
52-Week Range
$112-$215
Price range past year
Annual Return
+47.4%
Cumulative gain past year
| Period | RTX Return | S&P 500 |
|---|---|---|
| 1m | -5.0% | -3.6% |
| 3m | +4.8% | -4.0% |
| 6m | +17.8% | -2.0% |
| 1y | +47.4% | +16.2% |
| ytd | +4.8% | -3.8% |
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RTX Fundamental Analysis
Revenue & Profitability: The company has demonstrated solid revenue growth, with Q4 2025 revenue of $24.24 billion representing a 12.09% year-over-year increase. Profitability has been positive but variable; the Q4 2025 net margin was 6.69%, down from 8.53% in Q3 2025, indicating some quarterly pressure on earnings. Financial Health: The company maintains a moderate debt level with a debt-to-equity ratio of 0.61. Free cash flow generation is robust, with trailing twelve-month free cash flow reported at $7.94 billion, providing strong financial flexibility. Operational Efficiency: Return on Equity (ROE) stands at 10.32%, indicating reasonable efficiency in generating profits from shareholder equity. The current ratio of 1.03 suggests adequate, though not excessive, short-term liquidity to cover obligations.
Quarterly Revenue
$24.2B
2025-12
Revenue YoY Growth
+0.12%
YoY Comparison
Gross Margin
+0.19%
Latest Quarter
Free Cash Flow
$7.9B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is RTX Overvalued?
Valuation Level: Given the company's positive net income, the primary valuation metric is the P/E ratio. The trailing P/E ratio is 36.54, while the forward P/E is 25.66, suggesting the market expects earnings growth. The PEG ratio of 0.91, based on forward estimates, indicates the stock may be reasonably valued relative to its expected growth rate. Peer Comparison: Data not available for direct industry average comparisons in the provided inputs. However, the forward P/E of 25.7 and EV/EBITDA of 21.6 suggest a valuation that reflects the company's stable, defense-oriented business model and growth prospects.
PE
36.5x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range -26x~299x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
21.6x
Enterprise Value Multiple
Investment Risk Disclosure
RTX's primary risks stem from its valuation, cyclical exposure, and external dependencies. Financially, the stock trades at elevated multiples (P/E 36.5, EV/EBITDA 21.6), making it vulnerable to earnings disappointments or multiple compression. The recent quarterly net margin decline from 8.53% to 6.69% highlights operational volatility and potential cost pressures. While the debt-to-equity ratio of 0.61 is manageable, interest expense remains a meaningful line item.
Market and geopolitical risks are pronounced. The investment thesis is heavily predicated on sustained increases in U.S. defense budgets, as highlighted in recent news. A shift in political priorities, budget negotiations, or a de-escalation of global conflicts could rapidly remove this key catalyst. Furthermore, the commercial aerospace segment (Pratt & Whitney, Collins Aerospace) exposes RTX to economic cycles, travel demand, and supply chain challenges. The stock's low beta of 0.41 suggests it is less volatile than the market, but this may not hold if the defense growth narrative falters.
FAQ
Key risks include: 1) Valuation compression if earnings growth slows, 2) Dependency on sustained geopolitical tensions and defense budget increases, 3) Volatility in quarterly profit margins, as seen in the Q4 2025 decline, and 4) Exposure to cyclical downturns in the commercial aerospace sector.
The 12-month outlook has a base case target range of $185-$210 (60% probability), assuming consensus EPS of $9.20 is met. The bull case ($214-$235, 25%) requires better-than-expected defense spending. The bear case ($160-$185, 15%) involves disappointing growth or multiple contraction. The AI assessment is neutral with medium confidence.
RTX's valuation is full, leaning towards overvalued on an absolute basis (P/E 36.5), but reasonable relative to its growth (PEG 0.91). The forward P/E of 25.7 reflects expected earnings growth. It is not deeply undervalued; the stock is priced for the positive defense spending narrative to play out perfectly.
RTX is a high-quality company with strong growth prospects, primarily in defense. However, at its current price near $193 and a trailing P/E of 36.5, much of this optimism appears priced in. The synthesized rating is a Hold, suggesting investors should wait for a more attractive valuation or a pullback before buying.
RTX is more suitable for a long-term investment horizon. The defense budget cycle and aerospace recovery are multi-year themes. Short-term, the stock is susceptible to volatility around geopolitical news and quarterly earnings, especially given its elevated valuation. Long-term investors can better weather this volatility to capture the structural growth story.