Aerospace and defense group Raytheon Technologies Corporation (RTX) is set to release its Q2 earnings report this week. This has some investors wondering whether it’s a good idea to buy shares of RTX beforehand.
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What Wall Street Expects
Wall Street is expecting RTX to report quarterly earnings of $1.45 per share, which would be an increase of 2.8% compared to the same period last year. Revenues are forecasted to be $20.66 billion, marking a year-over-year increase of 4.8%.
Will RTX be able to beat these estimates? As can be seen below, it has a very good track record in doing just that.
Key Insights Ahead of Earnings
RTX reported a 5% increase in Q1 sales to $20.3 billion and a 10% rise in adjusted earnings per share. A ramp-up in defense spending following the Russian invasion of Ukraine has been a big driver for its Collins Aerospace and Raytheon divisions.
Governments around the world, such as European members of NATO, have laid out plans to increase investment following pressure from President Trump. The U.S. is also allocating record budgets to areas such as combat systems, cyber resilience and advanced propulsion technologies.
Recently, the company was awarded a $74 million contract to produce RAM Guided Missile Launching Systems for the U.S. Navy.
The company’s commercial aerospace arm, including Pratt & Whitney engines, has also seen higher sales. That’s down to demand from more travelers returning to the skies post-pandemic, a need to replace older aircraft and generally have a fleet with fuel-efficient and sustainable technologies. That fits well with RTX innovations such as hybrid-electric engines.
Morgan Stanley recently raised the firm’s price target to $165 from $135 and kept an Overweight rating. It expects industry dynamics in aerospace to remain on trend favoring stocks with a mix of aftermarket and original equipment exposure.
Is RTX a Good Stock to Buy Now?
On TipRanks, RTX has a Moderate Buy consensus based on 12 Buy and 6 Hold ratings. Its highest price target is $182. RTX stock’s consensus price target is $146.24 implying a 3.47% downside.
