RTX (RTX) AI Stock Analysis

• Market Cap: $213.59B
• Dividend Yield: 1.64%
• Average Volume (3M): 4.56M
• Price to Earnings (P/E): 34.3
• Beta (1Y): 0.54
• Revenue Growth: 15.44%
• EPS Growth: 164.00%
• Country: US
• Employees: 185,000
• Sector: Industrials
• Sector Strength: 76
• Industry: Aerospace & Defense
• EPS (TTM): 1.56
• Shares Outstanding: 1,338,541,900
• 10 Day Avg. Volume: 3,565,498
• 30 Day Avg. Volume: 4,563,185
• PEG Ratio: 0.54
• Price to Book (P/B): 2.56
• Price to Sales (P/S): 1.91
• P/FCF Ratio: 34.00
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: 2.85
• Enterprise Value/Gross Profit: 14.22
• Enterprise Value/Ebitda: 16.65
• 1Y Price Target: $167.46
• Price Target Upside: 4.77% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 76 Outperform
• Price Target: $177.00 ▲(10.74% Upside)

RTX's overall stock score of 76 reflects strong financial performance and positive earnings call sentiment, indicating robust growth and strategic positioning in the Aerospace & Defense industry. However, technical indicators suggest potential overvaluation, and the high P/E ratio warrants caution. The company's resilience in overcoming operational disruptions and improving sales outlook supports a favorable outlook.

Positive Factors

Defense Demand

Mitchill sees defense demand at a scale not witnessed in recent years, driven by rising EU defense spending and funding for key programs.

Financial Performance

RTN's defense margin improved to 11.6%, supported by increased foreign sales and stable productivity.

Tariff Mitigation

RTX reduced their tariff impact expectations from $800mn to $500mn, and more work is being done to mitigate these impacts.

Negative Factors

Operating Margin

Revenue outlook increases for both Pratt & Whitney and Collins were paired with adj. operating margin declines.

Supply Chain Challenges

The supply chain continues to face challenges, with three suppliers experiencing fires, leading to fastener shortages.

Tariff Headwind

The company expects a ~$500mn headwind from tariffs this year, with $125mn already incurred in the first half.

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 generates revenue through a diverse range of streams primarily focused on aerospace and defense. The company earns money by selling aircraft engines and components through its Pratt & Whitney segment, which services both commercial aviation and military customers. Collins Aerospace contributes to revenue through its offering of avionics, communications, and other aerospace systems. The Raytheon Intelligence & Space segment provides advanced technologies and solutions for government and commercial clients, including cybersecurity and intelligence services. The Raytheon Missiles & Defense division focuses on missile systems and defense solutions for military customers. Additionally, RTX benefits from long-term contracts with government agencies, including the U.S. Department of Defense, which provides a stable revenue base. Partnerships with other defense contractors and technology firms also enhance its market position and revenue potential.

RTX Financial Statement Overview

Summary

RTX exhibits strong financial health with consistent revenue and profit growth, robust cash flow generation, and efficient capital management. Despite a high leverage ratio, the company maintains a stable equity position and continues to improve profitability metrics, making it a solid player in the Aerospace & Defense industry.

Income Statement

RTX has shown a strong growth trajectory with revenue growth from $56.59B in 2020 to $83.60B in the TTM period, reflecting a solid upward trend. The gross profit margin is at a respectable level, indicating efficient cost management. EBIT and EBITDA margins have improved over time, demonstrating enhanced operational efficiency. The net profit margin also shows positive growth, underlining increased profitability.

Balance Sheet

RTX maintains a healthy equity ratio, suggesting a stable financial position. However, the debt-to-equity ratio is relatively high, which could imply potential leverage risk. Despite this, the return on equity has shown improvement, indicating effective use of shareholder funds to generate profit.

Cash Flow

The company has demonstrated robust operating cash flow generation, which covers net income comfortably, highlighting strong cash conversion capabilities. Free cash flow has seen growth, although it has fluctuated over the years. The free cash flow to net income ratio is healthy, supporting the company's ability to generate cash after accounting for capital expenditures.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	83.60B	80.74B	68.92B	67.07B	64.36B	56.67B
Gross Profit	16.76B	15.41B	12.09B	13.67B	12.50B	9.01B
EBITDA	14.32B	12.16B	9.37B	11.17B	10.56B	2.95B
Net Income	6.15B	4.77B	3.19B	5.20B	3.86B	-3.52B
Balance Sheet
Total Assets	167.14B	162.86B	161.87B	158.86B	161.40B	162.15B
Cash, Cash Equivalents and Short-Term Investments	4.78B	5.58B	6.59B	6.22B	7.83B	8.80B
Total Debt	43.59B	42.89B	45.24B	33.50B	33.14B	33.34B
Total Liabilities	102.89B	100.90B	100.42B	84.65B	86.70B	88.27B
Stockholders Equity	62.40B	60.16B	59.80B	72.63B	73.07B	72.16B
Cash Flow
Free Cash Flow	3.05B	4.53B	4.72B	4.39B	4.75B	1.64B
Operating Cash Flow	5.85B	7.16B	7.88B	7.17B	7.07B	3.61B
Investing Cash Flow	-2.68B	-1.53B	-3.04B	-2.83B	-1.36B	3.10B
Financing Cash Flow	-4.43B	-6.62B	-4.53B	-5.86B	-6.68B	-5.27B

RTX Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 159.84
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 159.84 is above the 20-day moving average (MA) of 155.81, above the 50-day MA of 151.13, and above the 200-day MA of 131.49, indicating a bullish trend. The MACD of 1.92 indicates Negative momentum. The RSI at 69.15 is Neutral, neither overbought nor oversold. The STOCH value of 87.05 is Negative, 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
GE	82 Outperform	$290.50B	37.22	40.20%	0.47%	-32.80%	69.39%
GD	79 Outperform	$86.66B	21.48	17.91%	1.79%	11.85%	16.12%
RTX	76 Outperform	$213.59B	34.33	10.13%	1.64%	15.44%	164.00%
LMT	71 Outperform	$106.33B	25.21	73.06%	2.87%	1.09%	-35.50%
NOC	71 Outperform	$84.91B	21.57	26.50%	1.45%	-0.65%	77.20%
Sector *	64 Neutral	$10.95B	16.37	8.81%	1.96%	2.68%	-15.33%
BA	53 Neutral	$177.57B	―	-162.23%	―	2.41%	-193.57%

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.