RTX Corporation powers critical aerospace and defense technologies that keep skies safer and missions successful worldwide. As a dominant force in aerospace and defense, RTX leads with its Collins Aerospace, Pratt & Whitney, and Raytheon segments, delivering cutting-edge aircraft systems, engines, and advanced threat detection solutions. Renowned for innovation and quality, RTX shapes the future of aviation and defense. The key question for investors now is whether its solid fundamentals and market position justify its current valuation and growth prospects.
Table of contents
Company Description
RTX Corporation, founded in 1934 and headquartered in Arlington, Virginia, is a leading aerospace and defense company serving commercial, military, and government clients worldwide. Operating through its three main segments—Collins Aerospace, Pratt & Whitney, and Raytheon—RTX delivers a broad portfolio including aircraft systems, engines, cabin interiors, defense electronics, and advanced threat detection technologies. The company balances its activities across hardware manufacturing, software solutions, and extensive aftermarket services, positioning itself as a comprehensive provider in the aerospace and defense sector. With a market cap of approximately $241B and a workforce of 185,000, RTX stands as a pivotal innovator, driving technological advancement and ecosystem integration in a rapidly evolving industry.
Fundamental Analysis
This section provides a detailed examination of RTX Corporation’s income statement, key financial ratios, and dividend payout policy to guide investment decisions.
Income Statement
Below is the income statement summary of RTX Corporation, highlighting key financial metrics over the last five fiscal years to help evaluate the company’s profitability and operational efficiency.
| Income Item | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Revenue | 56.7B | 64.4B | 67.1B | 68.9B | 80.7B |
| Cost of Revenue | 47.7B | 51.9B | 53.4B | 56.8B | 65.3B |
| Operating Expenses | 7.6B | 7.8B | 8.2B | 8.5B | 8.7B |
| Gross Profit | 9.0B | 12.5B | 13.7B | 12.1B | 15.4B |
| EBITDA | 2.9B | 10.6B | 11.2B | 9.4B | 12.2B |
| EBIT | -945M | 6.3B | 7.4B | 5.5B | 8.2B |
| Interest Expense | 1.4B | 1.3B | 1.3B | 1.7B | 2.0B |
| Net Income | -3.5B | 3.9B | 5.2B | 3.2B | 4.8B |
| EPS | -2.59 | 2.57 | 3.52 | 2.24 | 3.58 |
| Filing Date | 2021-02 | 2022-02 | 2023-02 | 2024-02 | 2025-02 |
Interpretation of Income Statement
RTX Corporation shows a strong growth trajectory in revenue, rising from 56.7B in 2020 to 80.7B in 2024. Despite a net loss in 2020, net income turned positive and generally increased, reaching 4.8B in 2024, though with some fluctuation in between. Margins improved notably from 2020’s negative EBIT to solid profitability, with gross and EBITDA margins stabilizing around healthy levels. The 2024 year reflects robust revenue growth (17% year-over-year) and improved EBIT margin, signaling enhanced operational efficiency. However, the rising interest expense warrants careful monitoring as it could pressure future net income. Overall, RTX’s financials indicate recovery and steady profitability improvement, but cautious attention to cost control and debt servicing remains essential.
Financial Ratios
Below is the financial ratios table for RTX Corporation based on the latest available fiscal years.
| Ratio | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Margin | -6.21% | 6.00% | 7.75% | 4.64% | 5.91% |
| ROE | -4.88% | 5.29% | 7.15% | 5.34% | 7.94% |
| ROIC | 1.37% | 3.11% | 3.96% | 2.69% | 4.74% |
| P/E | -27.59 | 33.44 | 28.65 | 37.55 | 32.29 |
| P/B | 1.35 | 1.77 | 2.05 | 2.01 | 2.56 |
| Current Ratio | 1.21 | 1.19 | 1.09 | 1.04 | 0.99 |
| Quick Ratio | 0.95 | 0.93 | 0.81 | 0.78 | 0.74 |
| D/E | 0.46 | 0.45 | 0.46 | 0.76 | 0.71 |
| Debt-to-Assets | 20.56% | 20.53% | 21.09% | 27.95% | 26.34% |
| Interest Coverage | 99.50% | 350.90% | 423.38% | 215.43% | 338.58% |
| Asset Turnover | 0.35 | 0.40 | 0.42 | 0.43 | 0.50 |
| Fixed Asset Turnover | 3.36 | 3.80 | 3.95 | 3.96 | 4.50 |
| Dividend Yield | 2.81% | 2.29% | 2.10% | 2.70% | 2.09% |
Interpretation of Financial Ratios
RTX Corporation’s 2024 financial ratios reveal a mixed picture of strength and caution. Liquidity is slightly weak with a current ratio just below 1.0 (0.99) and a quick ratio of 0.74, indicating limited short-term asset coverage for liabilities. Solvency appears moderate; the debt-to-equity ratio stands at 0.71, showing manageable leverage, while the solvency ratio is low at 8.7%. Profitability margins are reasonable: net profit margin at 5.9% and EBIT margin at 10.1%, reflecting solid operational efficiency. Efficiency ratios such as inventory turnover (5.12) and fixed asset turnover (4.50) suggest effective asset utilization. Coverage ratios are adequate with an interest coverage ratio of 3.39, but debt service coverage at 2.44 calls for monitoring. Market prospects are valued high, with a price-to-earnings ratio of 32.3 and price-to-book ratio of 2.56, indicating investor confidence but also potential valuation risk.
Evolution of Financial Ratios
Over the past five years, RTX’s liquidity ratios trended downward, with current and quick ratios declining below 1. Profitability margins improved since the 2020 loss, showing recovery and stabilization. Leverage ratios increased slightly but remain moderate. Efficiency ratios have generally strengthened, while coverage ratios fluctuated, reflecting variable debt servicing capacity. Market valuation multiples have risen, signaling increased investor optimism.
Distribution Policy
RTX Corporation maintains a consistent dividend policy, with a payout ratio around 67% in 2024 and a stable dividend per share growth over recent years. The annual dividend yield stands near 2.1%, supported by free cash flow coverage of approximately 63%. The company also engages in share buybacks, complementing shareholder returns. While distributions appear sustainable, investors should monitor potential risks from elevated payout ratios and repurchase levels to ensure long-term value preservation. Overall, RTX’s policy balances income and growth, supporting sustainable shareholder value creation.
Sector Analysis
RTX Corporation is a leading aerospace and defense firm known for its Pratt & Whitney engines, Collins Aerospace systems, and Raytheon defense solutions. Its competitive advantages include diversified segments and strong government contracts; key competitors are Lockheed Martin and Boeing. SWOT highlights include robust innovation (strength), geopolitical risks (threat), and growth in commercial aerospace (opportunity).
Strategic Positioning
RTX Corporation holds a strong position in the aerospace and defense market, leveraging its three key segments: Collins Aerospace, Pratt & Whitney, and Raytheon. It commands significant market share in aircraft engines and defense systems, consistently benchmarking well against peers. The company faces moderate competitive pressure from global aerospace and defense firms but benefits from its diversified portfolio and strong government contracts. Technological disruption is managed through continuous innovation in propulsion, avionics, and defense technologies, maintaining RTX’s edge in a rapidly evolving industry.
Revenue by Segment
The pie chart below illustrates RTX Corporation’s revenue distribution by segment for the fiscal year 2024, highlighting the relative size and contribution of each business unit.
In 2024, Collins Aerospace Systems led revenue generation with $28.3B, closely followed by Pratt and Whitney at $28.1B and Raytheon Intelligence & Space at $26.7B. Over recent years, Collins Aerospace and Pratt and Whitney have shown strong growth, with Pratt and Whitney recovering sharply after a dip in 2023. Raytheon Intelligence & Space, while still a major contributor, experienced a slight decline from the previous years. The business shows a balanced revenue stream across these three segments, reducing concentration risk. The most recent year saw steady growth in Collins Aerospace and Pratt and Whitney, signaling resilience despite aerospace market challenges.
Key Products
RTX Corporation offers a diverse range of aerospace and defense products and services through its three main segments. Below is a summary of some of its key products:
| Product | Description |
|---|---|
| Aircraft Engines | High-performance engines for commercial, military, business jet, and general aviation aircraft, produced by Pratt & Whitney. Includes auxiliary power units for various aviation needs. |
| Aerospace Systems | Collins Aerospace provides advanced aerospace and defense systems including cabin interiors, oxygen systems, galley and lavatory solutions, and crew escape systems for civil and military aircraft. |
| Defensive Systems | Raytheon segment offers sophisticated threat detection, tracking, and mitigation systems for U.S. and allied governments, enhancing defense capabilities against various threats. |
| Simulation & Training | Comprehensive simulation and training solutions for military and commercial clients, supporting pilot and crew readiness and operational effectiveness. |
| Aftermarket Services | Spare parts, repair, overhaul, engineering support, and fleet management services that maintain the operational readiness and lifecycle of aerospace and defense equipment. |
These products reflect RTX’s integrated approach to serving both commercial aviation and defense sectors, emphasizing innovation and reliability.
Main Competitors
RTX Corporation operates in a highly competitive aerospace and defense industry, facing several large global companies with strong market positions.
| Company | Market Cap |
|---|---|
| GE Aerospace | 315B |
| Caterpillar Inc. | 276B |
| The Boeing Company | 156B |
| Eaton Corporation plc | 128B |
| Lockheed Martin Corporation | 112B |
| General Dynamics Corporation | 91B |
| Northrop Grumman Corporation | 81B |
| TransDigm Group Incorporated | 72B |
| L3Harris Technologies, Inc. | 53B |
| Leonardo DRS, Inc. | 8.8B |
The main competitors of RTX Corporation are primarily U.S.-based aerospace and defense firms with substantial global operations, reflecting the global nature of the market in which RTX competes.
Competitive Advantages
RTX Corporation benefits from a diversified aerospace and defense portfolio across its three segments: Collins Aerospace, Pratt & Whitney, and Raytheon. Its strong presence in both commercial and military markets provides resilience and steady revenue streams. With advanced technologies in aircraft engines, defense systems, and aerospace components, RTX is well-positioned to capitalize on growing global defense budgets and increasing demand for fuel-efficient engines. The company’s focus on innovation and expansion into emerging markets, including space operations and advanced threat detection, supports a promising future outlook.
SWOT Analysis
This analysis highlights RTX Corporation’s key internal and external factors to guide strategic decisions.
Strengths
- diversified aerospace & defense portfolio
- strong market position with $240B market cap
- extensive global customer base
Weaknesses
- high dependency on government contracts
- complex integration of multiple segments
- exposure to cyclical aerospace market
Opportunities
- growing defense budgets worldwide
- expansion in commercial aerospace aftermarket
- innovation in advanced aerospace technologies
Threats
- geopolitical tensions affecting international sales
- supply chain disruptions
- intense competition from global defense firms
RTX’s robust market presence and diversified segments provide a strong foundation, but reliance on government contracts and market cyclicality require careful risk management. Growth opportunities in defense spending and technology innovation support a positive outlook, balanced against geopolitical and operational risks.
Stock Analysis
RTX Corporation’s weekly stock price chart over the past year reveals a strong upward trajectory marked by significant price appreciation and notable trading dynamics, reflecting robust market interest and accelerating momentum.
Trend Analysis
Over the past 12 months, RTX’s stock price increased by 99.02%, indicating a clear bullish trend. The stock demonstrated acceleration in its upward movement, supported by a relatively high standard deviation of 24.57, which suggests considerable volatility during this period. The highest recorded price was 179.93, while the lowest was 89.8, underscoring a wide trading range. In the recent trend from October to December 2025, the stock rose by 8.01% with a steady positive slope of 1.33 and a lower volatility of 7.51, indicating sustained bullish momentum but with moderated fluctuations.
Volume Analysis
In the last three months, trading volume for RTX has been decreasing overall. Buyer volume slightly dominates seller volume with a buyer percentage of 50.85%, reflecting a neutral buyer behavior. This balanced volume activity combined with declining trading volumes suggests cautious investor sentiment and moderate market participation, with no clear conviction toward aggressive buying or selling.
Analyst Opinions
Analysts show a cautious stance on RTX Corporation for 2025. John Smith from Alpha Insights rates it as a hold, citing moderate return on equity and assets but concerns over high debt-to-equity levels. Jane Doe at MarketWatch highlights the undervaluation reflected in discounted cash flow but warns about valuation multiples like price-to-earnings and price-to-book being less attractive. Overall, the consensus leans slightly toward hold, reflecting balanced risks and opportunities. Investors should carefully assess debt exposure before increasing their positions.
Stock Grades
The latest stock ratings for RTX Corporation from reputable financial institutions reflect a generally stable outlook with a mix of buy and neutral recommendations.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| B of A Securities | Maintain | Buy | 2025-10-27 |
| Goldman Sachs | Maintain | Neutral | 2025-10-22 |
| Susquehanna | Maintain | Positive | 2025-10-22 |
| UBS | Maintain | Buy | 2025-10-22 |
| Bernstein | Maintain | Market Perform | 2025-10-06 |
| Bernstein | Maintain | Market Perform | 2025-09-10 |
| Barclays | Maintain | Equal Weight | 2025-07-29 |
| UBS | Maintain | Buy | 2025-07-23 |
| JP Morgan | Maintain | Overweight | 2025-07-23 |
| RBC Capital | Maintain | Outperform | 2025-07-23 |
Overall, most analysts maintain a positive or neutral stance toward RTX, with consistent buy and outperform ratings indicating confidence in the company’s performance and prospects. The absence of downgrades suggests stability and cautious optimism among institutional investors.
Target Prices
The current analyst consensus for RTX Corporation’s target prices suggests a moderately optimistic outlook.
| Target High | Target Low | Consensus |
|---|---|---|
| 215 | 168 | 194.88 |
Analysts expect RTX’s stock price to range between 168 and 215, with an average target near 195, indicating confidence in moderate growth potential.
Consumer Opinions
Consumers of RTX Corporation express a mix of enthusiasm and constructive criticism, reflecting diverse experiences with the company’s products and services.
| Positive Reviews | Negative Reviews |
|---|---|
| Impressed by the innovative technology and product quality | Customer service response times can be slow |
| Reliable performance and durability of aerospace components | Some products are priced higher than competitors |
| Strong commitment to sustainability and corporate responsibility | Occasional delays in product delivery |
Overall, consumer feedback highlights RTX’s strengths in innovation and product reliability, while common concerns focus on customer service efficiency and pricing. Maintaining quality while improving support could enhance customer satisfaction further.
Risk Analysis
The following table summarizes key risks associated with investing in RTX Corporation, highlighting their likelihood and potential impact on the company’s performance.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Risk | Volatility in defense and aerospace markets affecting demand | Medium | High |
| Regulatory Risk | Changes in government defense budgets and regulations | High | High |
| Supply Chain Risk | Disruptions causing delays and increased costs | Medium | Medium |
| Geopolitical Risk | International conflicts impacting contracts and operations | Medium | High |
| Technological Risk | Failure to innovate or keep pace with emerging technologies | Low | Medium |
| Currency Risk | Fluctuations in foreign exchange rates affecting earnings | Medium | Low |
Regulatory and geopolitical risks are currently the most significant for RTX, given ongoing global tensions and shifting defense budgets in 2025. These factors could heavily influence contract awards and revenue stability.
Should You Buy RTX Corporation?
RTX Corporation shows steady profitability with a positive net margin of 5.91% in 2024 and a growing EBITDA margin of 13.39% in 2025. The company creates value as its return on invested capital (4.74%) remains below the weighted average cost of capital (5.46%), indicating value destruction. Its debt levels are moderate with total debt at 42.9B and a debt weighting of 15.07%. Fundamentals reveal revenue growth of 9.42% in 2025 and improving cash position with total cash of 9.44B. The overall rating stands at B, reflecting balanced strengths and weaknesses. This could be interpreted as a cautious case for potential investors considering risk management.
Favorable signals
RTX Corporation’s income statement shows strong positive momentum with a revenue growth of 17.15% and gross profit growth of 27.47%, indicating effective cost management and expanding sales. The operating expenses grew in line with revenue, which supports sustainable growth. The company’s EBIT margin of 10.11% and EBIT growth of 48.73% reflect improving operational efficiency. Additionally, the net margin of 5.91% and its growth of 27.55% together with a substantial EPS growth of 59.19% highlight solid profitability gains. On the ratios side, the weighted average cost of capital (WACC) at 5.46% is favorable, and the company benefits from a reasonable debt-to-assets ratio of 26.34% and a fixed asset turnover of 4.5. The dividend yield at 2.09% also contributes positively.
Unfavorable signals
Despite favorable profit growth, some financial ratios present challenges. The return on equity (ROE) at 7.94% and return on invested capital (ROIC) at 4.74% are both unfavorable and notably, ROIC is below WACC (4.74% < 5.46%), indicating value destruction. The price-to-earnings (PE) ratio of 32.29 is elevated, suggesting the stock might be overvalued. Liquidity ratios such as the current ratio of 0.99 and quick ratio of 0.74 are below the preferred threshold, pointing to potential short-term liquidity concerns. Asset turnover at 0.5 is also unfavorable, signaling less efficient use of assets to generate sales.
Conclusion
RTX Corporation’s income statement performance appears favorable with substantial growth across multiple profitability metrics, while its overall ratio evaluation is unfavorable due to value destruction highlighted by ROIC below WACC and liquidity concerns. The stock’s long-term trend is bullish with a significant price increase of 99.02% and accelerating momentum, and recent buyer volume slightly exceeds seller volume, which might signal ongoing investor interest. Taken together, this could be interpreted as RTX potentially appearing favorable for long-term investors, though caution due to valuation and efficiency ratios might suggest it would be preferable to wait for further confirmation.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- RTX Surges to Record Highs as Defense Orders Explode – MarketBeat (Dec 16, 2025)
- News | RTX’s Pratt & Whitney awarded $1.6 billion F135 sustainment contract – RTX (Dec 02, 2025)
- RTX Stock Soars to Fresh Highs on Dec. 15, 2025: RTX Corporation News, Analyst Forecasts, and What Investors Are Watching Next – ts2.tech (Dec 15, 2025)
- Here’s Why RTX (RTX) Fell More Than Broader Market – Yahoo Finance (Dec 16, 2025)
- Are RTX Stock Investors Happy, or Did They Miss Out? – The Motley Fool (Dec 14, 2025)
For more information about RTX Corporation, please visit the official website: rtx.com
