RTX RTX
What does RTX do?
RTX is a U.S. aerospace and defense company that offers systems and services for commercial, military and government customers worldwide. The business is divided into three segments: Collins Aerospace supplies onboard systems such as power generation, climate control, flight controls, sensors, cabin equipment and engine components. Pratt & Whitney develops and manufactures aircraft engines for commercial, business and military aircraft. Raytheon contributes missiles, air defense and radar systems, as well as sensors and effectors.
A significant part of earnings comes from the services business. Engines and onboard systems remain in use for decades and generate recurring income from maintenance, spare parts and repair. Competitively, RTX is among the largest providers in the industry. In engines, the company competes mainly with GE Aerospace and Rolls-Royce, and in defense systems with Lockheed Martin, Northrop Grumman and other defense contractors. High technical barriers to entry, lengthy certification processes and large installed fleets support its market position.
Score profile
Rank vs. Aerospace & Defense (36 companies). 10 = top of the group, 5 = middle. Calculated from the metrics below, without AI.
Metrics compared with the industry
On profitability and quality, RTX ranks above average in the group Aerospace & Defense (6.4/10). On growth, the company ranks above average in the group Aerospace & Defense (6.3/10). On valuation (higher = cheaper), the stock ranks in the middle in the group Aerospace & Defense (4.9/10). On financial strength, RTX ranks below average in the group Aerospace & Defense (3.9/10).
| Metric | Stock | Group median | Ranking |
|---|---|---|---|
| Forward P/E | 24.8x | 24.3x | better than 47 % |
| Trailing P/E | 32.6x | 29.0x | better than 35 % |
| PEG ratio | 2.0x | 1.5x | better than 33 % |
| EV/EBITDA | 17.5x | 18.4x | better than 55 % |
| Price/sales | 2.8x | 3.2x | better than 60 % |
| Price/book | 3.9x | 3.6x | better than 47 % |
| Revenue growth | 11.1% | 11.0% | better than 51 % |
| Earnings growth | 34.0% | 10.0% | better than 75 % |
| Gross margin | 21.1% | 22.8% | better than 46 % |
| Operating margin | 15.5% | 10.7% | better than 81 % |
| Net margin | 8.8% | 7.7% | better than 74 % |
| Return on equity | 12.9% | 11.9% | better than 56 % |
| Debt/equity | 54.8% | 51.8% | better than 40 % |
| Current ratio | 1.0x | 2.2x | better than 7 % |
| Free cash flow yield | 3.1% | 1.5% | better than 71 % |
| Dividend yield | 1.5% | 0.9% | – |
| Payout ratio | 45.9% | 26.0% | – |
| Beta | 0.28 | 0.96 | – |
Valuation: what is RTX worth?
Two valuation approaches – a discounted cash flow model and a valuation at the industry’s median multiples – give RTX a model range of 153.27 USD to 244.72 USD per share.
23 analysts, average rating “Buy”, average price target 227.91 USD (+13.7%).
The full DCF matrix, the reverse DCF (what growth the price implies) and scenarios are part of the Pro analysis.
What the business depends on
- Aircraft demand and airlines' flight hours determine new business and the higher-margin services business for engines and onboard systems.
- Government defense budgets and the security policy environment drive orders for missiles, air defense and sensors in the Raytheon segment.
- A large installed base of engines and systems secures recurring income from spare parts and maintenance over long periods.
Risks
- Quality problems with engines can result in costly recalls, inspections and compensation payments to customers.
- Dependence on government contracts carries risks from budget decisions, program delays, fixed-price contracts and political conditions.
- Supply chain bottlenecks and production problems at suppliers can delay deliveries and weigh on profitability.
What to look for with RTX
The order backlog is particularly informative because, given long program durations, it shows future capacity utilization in defense and commercial aviation.