RTX Corporation: A Major Player in Aerospace and Defense
RTX Corporation (RTX), based in Arlington, Virginia, specializes in providing systems and services for commercial, military, and government clients within the aerospace and defense sectors. With a market capitalization of $157.1 billion, RTX holds the title of the largest aerospace and defense company in the world. Their offerings include avionics systems, aviation systems, communication and navigation devices, as well as aircraft lighting, seating, environmental control systems, flight control systems, and engine components.
Strong Stock Performance Compared to the Market
RTX shares have notably outperformed the wider market over the past year, increasing by 43.8% compared to the broader S&P 500 Index ($SPX), which saw a rise of nearly 32.7%. In 2024, RTX stock has risen by 41.4%, outperforming the SPX’s increase of 21.2% year-to-date (YTD).
Outperformance Against Industry Peers
When compared to the iShares U.S. Aerospace & Defense ETF (ITA), RTX’s performance becomes even clearer. While the ETF has climbed approximately 29.2% in the past year, RTX’s YTD returns outpace the ETF’s 15.7% gains.
Factors Behind RTX’s Success
RTX’s growth is largely attributed to its established presence in both the commercial aerospace and defense markets, where it enjoys strong aftermarket support and a rise in demand. Key drivers for the company include the effective GTF inspections program and improving defense margins. Increased missile demand has also contributed to the rising stock price, while the company’s solid cash flow and capital returns play crucial roles in maintaining its success.
Q3 Results and Analyst Sentiments
On October 22, RTX reported its third-quarter results, showing a slight decrease in share price afterward. The reported revenue was $20.1 billion, exceeding analysts’ expectations of $19.8 billion. Furthermore, the adjusted earnings per share (EPS) stood at $1.45, surpassing the anticipated $1.34.
For the current fiscal year, which ends in December, analysts forecast a 9.9% growth in RTX’s EPS, projecting it to reach $5.56 on a diluted basis. Impressively, RTX has consistently exceeded consensus estimates in each of its last four quarters.
The consensus rating among 22 analysts covering RTX stock is a “Moderate Buy,” which includes six “Strong Buy” ratings, 15 “Holds,” and one “Strong Sell.”
Price Targets Indicate Potential Growth
Analyst David Strauss from Barclays PLC (BCS) maintained an “Equal Weight” rating on October 29 and raised the price target to $130, suggesting a potential upside of 9.3%. The average price target is set at $131.81, indicating a potential 10.8% premium over current prices. The highest target of $157 implies an aggressive upside potential of 32%.
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On the date of publication, Neha Panjwani 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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
