RTX (RTX) AI Stock Analysis

• Market Cap: $190.60B
• Dividend Yield: 1.92%
• Average Volume (3M): 5.85M
• Price to Earnings (P/E): 41.5
• Beta (1Y): 0.56
• Revenue Growth: 15.11%
• EPS Growth: 34.14%
• Country: US
• Employees: 185,000
• Sector: Industrials
• Sector Strength: 84
• Industry: Aerospace & Defense
• EPS (TTM): 1.47
• Shares Outstanding: 1,335,953,700
• 10 Day Avg. Volume: 7,952,622
• 30 Day Avg. Volume: 5,846,785
• PEG Ratio: 0.78
• Price to Book (P/B): 2.05
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 33.90
• Enterprise Value/Market Cap: 0.92
• Enterprise Value/Revenue: 0.56
• Enterprise Value/Gross Profit: 11.04
• Enterprise Value/Ebitda: 3.86
• 1Y Price Target: $138.07
• Price Target Upside: -3.22% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 17

• Rating: 76 Outperform
• Price Target: $156.00 ▲(9.34%Upside)

RTX's solid financial performance and optimistic earnings call contribute positively to its stock score. Technical indicators show bullish momentum, although valuation is a concern due to a high P/E ratio. Despite potential tariff impacts, the company's strong backlog and strategic initiatives suggest resilience and growth potential.

Positive Factors

Cash Flow

Cash flows from operations increased significantly year-over-year, reaching $1,305 million, demonstrating strong financial health.

Financial Performance

RTX Corporation reported first-quarter sales of $20.3 billion, surpassing estimates, with strong performance in its Collins Aerospace and Pratt & Whitney divisions.

Revenue Growth

Raytheon sales to Europe are expected to increase significantly, with a reported 80% year-over-year growth, potentially boosting RTX's revenue.

Negative Factors

Labor Strike

Members of IAM 700 & 1746 voted to reject their contract proposal with Pratt & Whitney, resulting in a strike.

Sales Performance

Raytheon experienced a decrease in sales by 5% year-over-year, impacted by divestiture in cybersecurity and lower volume in air and space defense systems.

Tariff Impact

The $850MM of net direct tariff impact implies an 8% cut to EPS guidance.

RTX Business Overview & Revenue Model

Company Description

RTX Corporation, an aerospace and defense company, provides systems and services for the commercial, military, and government customers in the United States and internationally. It operates through three segments: Collins Aerospace, Pratt & Whitney, and Raytheon. The Collins Aerospace Systems segment offers aerospace and defense products, and aftermarket service solutions for civil and military aircraft manufacturers and commercial airlines, as well as regional, business, and general aviation, defense, and commercial space operations. This segment also designs, produces, and supports cabin interior, including oxygen systems, food and beverage preparation, storage and galley systems, and lavatory and wastewater management systems; battlespace, test and training range systems, crew escape systems, and simulation and training solutions; information management services; and aftermarket services that include spare parts, overhaul and repair, engineering and technical support, training and fleet management solutions, and asset and information management services. Its Pratt & Whitney segment supplies aircraft engines for commercial, military, business jet, and general aviation customers; and produces, sells, and services military and commercial auxiliary power units. The Raytheon segment provides defensive and offensive threat detection, tracking, and mitigation capabilities for U.S., foreign government, and commercial customers. The company was formerly known as Raytheon Technologies Corporation and changed its name to RTX Corporation in July 2023. RTX Corporation was incorporated in 1934 and is headquartered in Arlington, Virginia.

How the Company Makes Money

RTX Corporation generates revenue through its three main business segments: Collins Aerospace, Pratt & Whitney, and Raytheon. Collins Aerospace contributes to the company's earnings by offering avionics, cabin systems, and information management services for commercial and military aircraft. Pratt & Whitney earns revenue by manufacturing and servicing commercial and military jet engines, leveraging long-term contracts with airlines and defense departments. The Raytheon segment provides a diverse range of defense and cybersecurity solutions, including missile defense systems, radars, and cybersecurity services, primarily selling to government agencies and international allies. Additionally, strategic partnerships and contracts with various government entities and defense contractors play a crucial role in sustaining and expanding RTX's revenue streams.

RTX Financial Statement Overview

Summary

RTX demonstrates strong revenue growth and profitability with a solid equity base and manageable leverage. Cash flow generation is robust, supporting strategic initiatives. The financial health is solid, positioning the company well in the industry.

Income Statement

RTX demonstrates strong revenue growth, with a notable increase in total revenue from $68.92 billion in 2023 to $81.739 billion TTM. Gross profit margin improved to 39.3% in TTM, indicating efficient cost management. Despite a slight dip in net income from 2024, the overall trajectory remains positive with a strong EBIT margin of 9.3% and EBITDA margin of 13.7% in TTM, showcasing operational efficiency.

Balance Sheet

The balance sheet reflects a solid equity base with stockholders' equity of $61.516 billion in TTM, with a stable equity ratio of 37.3%. The debt-to-equity ratio stands at 0.65, indicating manageable leverage levels. Return on equity is 7.6% in TTM, slightly lower than previous years, suggesting moderate efficiency in generating returns.

Cash Flow

RTX's cash flow performance is strong, with a free cash flow growth rate of 13.97% from 2024 to TTM. The operating cash flow to net income ratio is 1.73, indicating strong cash generation relative to net income. Free cash flow to net income ratio is 1.1 in TTM, reflecting healthy liquidity and operational cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	81.74B	80.74B	68.92B	67.07B	64.39B	56.59B
Gross Profit	15.96B	15.41B	12.09B	13.67B	12.49B	8.53B
EBITDA	12.78B	12.16B	9.61B	11.17B	10.56B	2.95B
Net Income	4.60B	4.77B	3.19B	5.20B	3.86B	-2.93B
Balance Sheet
Total Assets	164.86B	162.86B	161.87B	158.86B	161.40B	162.15B
Cash, Cash Equivalents and Short-Term Investments	5.77B	5.58B	6.59B	6.22B	7.83B	8.80B
Total Debt	41.30B	42.89B	45.24B	33.50B	33.14B	33.34B
Total Liabilities	101.56B	100.90B	100.42B	84.65B	86.70B	88.27B
Stockholders Equity	61.52B	60.16B	59.80B	72.63B	73.07B	72.16B
Cash Flow
Free Cash Flow	5.17B	4.53B	4.72B	4.39B	4.75B	1.64B
Operating Cash Flow	8.12B	7.16B	7.88B	7.17B	7.07B	3.61B
Investing Cash Flow	-2.90B	-1.53B	-3.04B	-2.83B	-1.36B	3.10B
Financing Cash Flow	-5.67B	-6.62B	-4.53B	-5.86B	-6.68B	-5.27B

RTX Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 142.67
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RTX, the sentiment is Positive. The current price of 142.67 is above the 20-day moving average (MA) of 141.51, above the 50-day MA of 133.77, and above the 200-day MA of 125.07, indicating a bullish trend. The MACD of 2.86 indicates Positive momentum. The RSI at 56.55 is Neutral, neither overbought nor oversold. The STOCH value of 28.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RTX.

RTX Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LMT	80 Outperform	$107.40B	19.88	82.55%	2.88%	3.12%	-15.29%
GD	79 Outperform	$76.74B	19.51	18.23%	2.10%	14.11%	17.65%
RTX	76 Outperform	$190.60B	41.46	7.54%	1.92%	15.11%	34.14%
NOC	74 Outperform	$70.08B	19.16	25.41%	1.90%	0.61%	77.28%
Sector *	71 Outperform	¥249.80B	12.82	8.49%	3.14%	6.31%	12.92%
GE	64 Neutral	$266.49B	38.97	28.09%	0.58%	-42.92%	109.75%
BA	58 Neutral	$149.97B	―	-162.23%	―	-9.15%	-406.76%

RTX Corporate Events

RTX Announces Leadership Transition with New Chairman

On February 3, 2025, RTX Corporation announced that Gregory J. Hayes will step down as Executive Chairman and Board member on April 30, 2025, transitioning to a Special Advisor role to the CEO until January 2, 2026. Christopher T. Calio, currently President and CEO, will also assume the role of Chairman, effective April 30, 2025. Hayes, who has led RTX through significant industry changes, will continue with a base salary of $1,100,000 but will forgo annual incentives for 2025. This leadership change is expected to sustain RTX’s strategic priorities and growth trajectory, reinforcing its operations and stakeholder relations.