Rtx Corporation (RTX), previously known as Raytheon Technologies, is a prominent provider of engineering and production services to the aerospace and defense industry. Founded in 1985, the company operates through Collins Aerospace; Pratt & Whitney; and Raytheon segments, providing systems and services for commercial, military, and government customers in the U.S. and internationally. Its market cap currently stands at $141.4 billion.
RTX stock has underperformed the broader market over the last year. RTX has gained 11.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 26.8%. However, in 2024, shares of RTX rose 27.2%, surpassing SPX's 9.7% gains on a YTD basis.
Zooming in further, RTX's gain over the past 52 weeks trails behind the S&P Aerospace & Defense SPDR’s (XAR) 27.4% returns. However, the stock's double-digit YTD gain significantly outshines the exchange-traded fund's 6% returns over the same time frame.
RTX's impressive price performance in 2024 is fueled by rising defense budgets amid global conflicts like the Russia-Ukraine and Middle East wars. As a major defense contractor, RTX bagged significant deals, including ones with Germany and Ukraine, that boosted its Q1 earnings results, reported on April 23. The heightened geopolitical tensions and subsequent military investments are driving RTX's financial success, buoying its share value.
For the current fiscal year, ending in December 2024, analysts expect RTX to report EPS growth of 6.7% year over year to $5.40 on a diluted basis. The company's earnings surprise history is robust. It beat or matched the consensus estimate in each of the last four quarters.
Among the 21 analysts covering RTX stock, the consensus rating is a “Moderate Buy.” That’s based on six “Strong Buy” ratings, 14 “Holds,” and one “Strong Sell.”
This configuration has been slightly more bullish than three months before, with five analysts suggesting a "Strong Buy" rating on the stock.
After the aerospace and defense company’s Q1 earnings results, multiple analyst firms have raised their price targets on RTX, including Susquehanna analyst Christopher Rolland, who maintained a "Positive" rating and raised the price target on the stock by $9 to $119 a share. The firm’s optimism is driven by RTX's hefty backlog and bright revenue outlook in Commercial, Defense, and Aftermarket segments, plus the chance for margin growth across different units.
While RTX is currently trading at a premium to the mean price target of $100.16, the Street-high price target of $120 suggests an upside potential of 11.7%.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
