tiprankstipranks
Trending News
More News >
RTX (RTX)
NYSE:RTX

RTX (RTX) AI Stock Analysis

Compare
11,383 Followers

Top Page

RT

RTX

(NYSE:RTX)

Rating:73Outperform
Price Target:
RTX demonstrates strong financial performance with robust revenue growth and profitability, supported by a solid balance sheet and strong cash flow generation. The technical analysis suggests mixed momentum with a cautious outlook due to negative MACD and neutral RSI. Valuation metrics indicate potential overvaluation concerns given the high P/E ratio, although the dividend yield offers moderate income potential. The latest earnings call reinforces a positive outlook with notable growth and strategic positioning, despite some challenges related to tariffs and supply chains.
Positive Factors
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.
Growth Prospects
Pratt Organic Growth of 14% in Q1 included a strong start for aftermarket.
Market Position
RTX is viewed favorably in the defense sector due to its strong position relative to the growing US defense budget and European rearmament needs.
Negative Factors
Labor Disputes
Pratt & Whitney machinists have gone on strike after rejecting their contract proposal.
Operational Challenges
Supply chain bottlenecks—particularly around structural castings, isothermal forgings, and rocket motors—remain a headwind.
Tariff Impact
The recent enactment of incremental U.S. and non-U.S. tariffs is expected to have a cost impact on RTX, affecting their operations in North America, China, and other parts of the world.

RTX (RTX) vs. SPDR S&P 500 ETF (SPY)

RTX Business Overview & Revenue Model

Company DescriptionRTX 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 MoneyRTX 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 Key Performance Indicators (KPIs)

Any
Any
Operating Margin by Segment
Operating Margin by Segment
Reveals profitability across different business segments, highlighting which areas are most efficient and where there might be room for improvement or strategic focus.
Chart InsightsCollins Aerospace's operating margin shows a steady recovery post-2020, reflecting strategic resilience. Pratt and Whitney's margin faced a significant dip in late 2023 but rebounded, aligning with increased MRO output and defense sales growth. Intelligence and Space, and Missiles and Defense segments have ceased reporting margins, potentially indicating strategic shifts or restructuring. Raytheon's margin has stabilized post-2023, despite a sales decline due to divestitures. The earnings call highlights robust financial performance and backlog growth, yet tariff impacts and supply chain concerns could pose future risks.
Data provided by:Main Street Data

RTX Earnings Call Summary

Earnings Call Date:Apr 22, 2025
(Q1-2025)
|
% Change Since: 9.58%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong financial performance, growth in commercial aftermarket and defense sales, and significant progress in key programs like the GTF. However, concerns about potential tariff impacts and supply chain disruptions were notable, alongside a decline in Raytheon's adjusted sales. Despite the challenges, the overall sentiment was optimistic, supported by a strong backlog and strategic positioning in key markets.
Q1-2025 Updates
Positive Updates
Strong Financial Performance in Q1 2025
RTX reported 8% organic sales growth, 120 basis points of segment margin expansion, and a $900 million improvement in free cash flow compared to the prior year.
Commercial Aftermarket and Defense Sales Growth
Commercial aftermarket sales were up 21%, commercial OE sales up 3%, and defense sales up 4% organically.
GTF Program and Isothermal Forging Progress
PW1100 MRO output increased by 35% year-over-year, with a 14% sequential increase. Isothermal forging output was up over 10% versus the prior year.
Significant Backlog Growth
RTX ended the quarter with a backlog of $217 billion, up 8% year-over-year, including $125 billion in commercial orders and $92 billion in defense awards.
Raytheon's Book-to-Bill Ratio
Raytheon reported a rolling 12-month book-to-bill ratio of 1.35, with notable awards including $750 million for Netherlands air and missile defense capabilities.
Negative Updates
Tariff Impacts and Uncertainty
RTX expects a potential direct impact of $850 million from tariffs if current rates remain, with significant cost impacts from Canada, Mexico, China, and steel and aluminum tariffs.
Supply Chain Concerns
Ongoing concerns about potential supply chain disruptions due to tariffs, with emphasis on maintaining material flow and avoiding operational disruptions.
Raytheon Sales Decline
Raytheon sales were down 5% on an adjusted basis due to the cybersecurity divestiture, though organic sales were up 2%.
Company Guidance
During the RTX First Quarter 2025 Earnings Conference Call, the company reported robust financial and operational performance, highlighting key metrics such as an 8% organic sales growth and a 120 basis points expansion in segment margins. The company also achieved a significant improvement in free cash flow, exceeding $900 million compared to the prior year. Commercial aftermarket sales increased by 21%, commercial OE sales by 3%, and defense sales by 4%. Additionally, the PW1100 MRO output rose by 35% year-over-year. The backlog was reported at $217 billion, up 8% from the previous year. The company addressed potential impacts of tariffs, estimating a $850 million cost impact for the year, net of mitigations, with a focus on mitigating these through various strategies.

RTX Financial Statement Overview

Summary
RTX displays robust financial health with consistent revenue growth and strong profitability metrics. The company maintains a healthy balance sheet with manageable leverage and a solid equity base. Cash flow generation is strong, supporting operational and strategic initiatives. Overall, RTX is well-positioned in the Aerospace & Defense industry, demonstrating financial resilience and growth potential.
Income Statement
85
Very Positive
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
74
Positive
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
78
Positive
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
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
81.74B80.74B68.92B67.07B64.39B56.59B
Gross Profit
15.96B15.41B12.09B13.67B12.49B8.53B
EBIT
7.60B6.54B3.56B7.30B6.90B2.20B
EBITDA
12.78B12.53B9.61B11.17B10.56B2.95B
Net Income Common Stockholders
4.60B4.77B3.19B5.20B3.86B-2.93B
Balance SheetCash, Cash Equivalents and Short-Term Investments
5.77B5.58B6.59B6.22B7.83B8.80B
Total Assets
164.86B162.86B161.87B158.86B161.40B162.15B
Total Debt
41.30B40.54B45.24B33.50B33.14B33.34B
Net Debt
36.14B34.96B38.65B27.28B25.31B24.54B
Total Liabilities
101.56B100.90B100.42B84.65B86.70B88.27B
Stockholders Equity
61.52B60.16B59.80B72.63B73.07B72.16B
Cash FlowFree Cash Flow
5.17B4.53B4.72B4.39B4.75B1.64B
Operating Cash Flow
8.12B7.16B7.88B7.17B7.07B3.61B
Investing Cash Flow
-2.90B-2.63B-3.04B-2.83B-1.36B3.10B
Financing Cash Flow
-5.67B-6.62B-4.53B-5.86B-6.68B-5.27B

RTX Technical Analysis

Technical Analysis Sentiment
Positive
Last Price137.50
Price Trends
50DMA
129.21
Positive
100DMA
127.55
Positive
200DMA
123.06
Positive
Market Momentum
MACD
2.37
Negative
RSI
64.29
Neutral
STOCH
78.87
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 137.5 is above the 20-day moving average (MA) of 132.82, above the 50-day MA of 129.21, and above the 200-day MA of 123.06, indicating a bullish trend. The MACD of 2.37 indicates Negative momentum. The RSI at 64.29 is Neutral, neither overbought nor oversold. The STOCH value of 78.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RTX.

RTX Risk Analysis

RTX disclosed 29 risk factors in its most recent earnings report. RTX reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
A violation by Raytheon Company or the Company of any one of the deferred prosecution agreements or Securities and Exchange Commission (SEC) administrative order announced on October 16, 2024 could adversely affect our business. Q4, 2024

RTX Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
GDGD
78
Outperform
$74.00B19.1318.23%2.07%14.11%17.65%
LMLMT
77
Outperform
$112.19B20.6882.55%2.69%3.12%-15.29%
NONOC
74
Outperform
$69.57B19.0325.41%1.70%0.61%77.28%
RTRTX
73
Outperform
$183.64B40.317.54%1.88%15.11%34.14%
GEGE
71
Outperform
$263.91B38.5928.09%0.60%-42.92%109.75%
65
Neutral
$4.44B12.225.28%248.14%4.08%-12.12%
BABA
52
Neutral
$156.32B-162.23%-9.15%-406.76%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
RTX
RTX
137.50
31.82
30.11%
BA
Boeing
213.43
24.81
13.15%
GD
General Dynamics
276.04
-15.21
-5.22%
GE
GE Aerospace
248.87
88.56
55.24%
LMT
Lockheed Martin
480.17
23.33
5.11%
NOC
Northrop Grumman
488.22
47.57
10.80%

RTX Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
RTX Announces Leadership Transition with New Chairman
Neutral
Feb 3, 2025

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.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.