Raytheon Technologies (RTX) AI Stock Analysis

• Market Cap: $263.77B
• Dividend Yield: 1.44%
• Average Volume (3M): 5.63M
• Price to Earnings (P/E): 39.6
• Beta (1Y): 0.65
• Revenue Growth: 8.79%
• EPS Growth: 39.63%
• Country: US
• Employees: 185,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 1.55
• Shares Outstanding: 1,342,287,700
• 10 Day Avg. Volume: 7,367,088
• 30 Day Avg. Volume: 5,626,802
• PEG Ratio: 0.90
• Price to Book (P/B): 3.78
• Price to Sales (P/S): 2.78
• P/FCF Ratio: 31.06
• Enterprise Value/Market Cap: 1.15
• Enterprise Value/Revenue: 3.41
• Enterprise Value/Gross Profit: 16.99
• Enterprise Value/Ebitda: 20.18
• 1Y Price Target: $217.92
• Price Target Upside: 10.90% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): 6.83
• Revenue Forecast (FY): $93.25B

• Rating: 75 Outperform
• Price Target: $226.00 ▲(15.01% Upside)

Overall score reflects improving financial performance (higher revenue, better margins, stronger free cash flow, and reduced leverage) and strong technical uptrend. These positives are moderated by a demanding valuation (high P/E with a modest yield) and guidance that, while positive, includes meaningful near-term headwinds such as tariffs, elevated CapEx, and GTF-related cash outflows.

Positive Factors

Free cash flow generation

Sustained, material free cash flow delivery demonstrates strong earnings-to-cash conversion, enabling debt paydown, reinvestment and shareholder returns. Over the next 2–6 months this cash profile supports execution of guidance and reduces reliance on external financing for growth investments.

Large, multi-year backlog

A $268B backlog with book-to-bill >1 provides durable revenue visibility across commercial and defense programs, underpinning mid-term organic growth and margin improvement. Backlog breadth reduces near-term cyclicality and supports capacity investments and aftermarket revenue streams.

Diversified commercial and defense franchise

Broad business mix across engines, avionics, missiles and services spreads demand risk across commercial OEM, aftermarket and defense contracting. Recurring MRO and long-term government contracts provide steadier cash and strategic leverage for R&D and industrial investment over the medium term.

Negative Factors

Large absolute debt and near-term maturities

Although leverage has improved, the absolute debt stock remains large and requires continued strong free cash flow to sustain reductions. Near-term maturities and required repayments mean cash allocation choices (debt paydown vs. capex/dividends) will materially affect financial flexibility over the coming months.

GTF-related customer compensation cash outflows

Program-specific compensation and remediation obligations create recurring cash pressure tied to the GTF fleet. These scheduled outflows materially reduce available FCF for debt reduction or reinvestment and introduce program execution risk that can persist over multiple quarters.

Tariffs and supply-chain constraints

Sustained tariff costs and long-lead supplier bottlenecks compress margins and require additional capital and industrial investments to restore throughput. These structural headwinds can weigh on margin sustainability and require ongoing operational remediation over the medium term.

Raytheon Technologies 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 generates revenue through a diversified portfolio of products and services across its various sectors. Key revenue streams include the sale of commercial and military aircraft engines through Pratt & Whitney, which provides maintenance services and spare parts as ongoing revenue. Collins Aerospace contributes significantly through avionics, landing systems, and connectivity solutions for commercial aircraft. Additionally, the defense segment, including Raytheon Intelligence & Space and Raytheon Missiles & Defense, earns revenue from government contracts for advanced defense systems and technologies. RTX also benefits from long-term contracts and partnerships with government entities and commercial airlines, ensuring a steady stream of income. The company invests in research and development to innovate and enhance its offerings, further solidifying its market position and revenue potential.

Raytheon Technologies Financial Statement Overview

Summary

Fundamentals are solid and improving: TTM revenue rose to $88.6B with stronger margins (EBIT ~11.8%, net ~7.6%) and net income up to ~$6.7B. Cash generation strengthened meaningfully (TTM FCF ~$7.9B, ~75% of net income) and debt has been reduced to ~$36.1B with improved debt-to-equity (~0.55). Offsets are the still-large absolute debt load and historical variability/cyclicality in profitability and cash flows.

Income Statement

Profitability and growth have improved meaningfully versus earlier years. Revenue rose to $88.6B in TTM (Trailing-Twelve-Months), up from $80.7B in 2024 and $68.9B in 2023, and margins strengthened (TTM gross margin ~20.1%, EBIT margin ~11.8%, net margin ~7.6%). Net income also stepped up to $6.7B TTM from $4.8B in 2024. Key watch-out: results have been somewhat cyclical over the period (notably the 2020 loss), so while the current trajectory is strong, durability through the cycle remains a consideration.

Balance Sheet

Leverage looks manageable and has improved recently. Total debt declined to ~$36.1B TTM (Trailing-Twelve-Months) from ~$42.9B in 2024 and ~$45.2B in 2023, while equity increased to ~$65.2B, bringing debt-to-equity down to ~0.55 (from ~0.71 in 2024). Returns on equity improved to ~10.6% TTM versus ~7.9% in 2024. Primary weakness: the company still carries a sizable absolute debt load for the sector, so sustained earnings/cash generation is important to keep the balance sheet trending stronger.

Cash Flow

Cash generation strengthened substantially in the latest period. Operating cash flow increased to ~$10.6B TTM (Trailing-Twelve-Months) from ~$7.2B in 2024, and free cash flow rose to ~$7.9B (about 75% of net income), indicating solid earnings-to-cash translation. Free cash flow growth was very strong in TTM after being flat-to-down in 2024. Main risk: cash flow has shown variability across years, so consistency will be important to support debt reduction and shareholder returns.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	88.60B	80.74B	68.92B	67.07B	64.36B
Gross Profit	17.79B	15.41B	12.09B	13.67B	12.50B
EBITDA	13.78B	12.16B	9.37B	11.17B	10.56B
Net Income	6.73B	4.77B	3.19B	5.20B	3.86B
Balance Sheet
Total Assets	171.08B	162.86B	161.87B	158.86B	161.40B
Cash, Cash Equivalents and Short-Term Investments	7.43B	5.58B	6.59B	6.22B	7.83B
Total Debt	41.11B	42.89B	45.24B	33.50B	33.14B
Total Liabilities	103.94B	100.90B	100.42B	84.65B	86.70B
Stockholders Equity	65.25B	60.16B	59.80B	72.63B	73.07B
Cash Flow
Free Cash Flow	7.94B	4.53B	4.72B	4.39B	4.75B
Operating Cash Flow	10.57B	7.16B	7.88B	7.17B	7.07B
Investing Cash Flow	-1.26B	-1.53B	-3.04B	-2.83B	-1.36B
Financing Cash Flow	-7.49B	-6.62B	-4.53B	-5.86B	-6.68B

Raytheon Technologies Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 196.51
• 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 196.51 is below the 20-day moving average (MA) of 198.43, above the 50-day MA of 188.62, and above the 200-day MA of 162.33, indicating a bullish trend. The MACD of 2.41 indicates Positive momentum. The RSI at 59.74 is Neutral, neither overbought nor oversold. The STOCH value of 33.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RTX.

Raytheon Technologies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NOC	77 Outperform	$96.34B	23.34	26.17%	1.55%	-0.14%	72.35%
RTX	75 Outperform	$263.77B	39.59	10.74%	1.44%	8.79%	39.63%
GD	74 Outperform	$93.65B	22.41	17.66%	1.73%	11.86%	17.39%
LMT	74 Outperform	$144.65B	29.26	76.87%	2.77%	2.88%	-35.15%
GE	70 Outperform	$329.04B	38.58	45.24%	0.48%	-19.21%	31.83%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
BA	56 Neutral	$185.55B	124.62	289.00%	―	10.19%	-6.03%

Raytheon Technologies Corporate Events

RTX Initiates $2.5 Billion Pension Buy-Out

On November 7, 2025, RTX Corporation initiated a buy-out conversion of a group annuity contract from The Prudential Insurance Company of America, transferring approximately $2.5 billion of pension obligations. This transaction, affecting around 60,000 retirees and beneficiaries, will not change their benefits and maintains the Plan’s funded status, while RTX anticipates a one-time, non-cash pretax pension settlement charge of about $300 million in Q4 2025.

The most recent analyst rating on (RTX) stock is a Buy with a $215.00 price target. To see the full list of analyst forecasts on RTX stock, see the RTX Stock Forecast page.