RTX changes
Pick any two versions below to diff them.
- Price
- $186.56 → $193.92(+3.9%)
- Discount category
- Below intrinsic value → Close to intrinsic value
- Next earnings
- Oct 20, 2026 → Jan 20, 2027
- Next earnings is estimate
- No → Yes
- About
- RTX makes aircraft engines, aircraft systems and defense products. It reports three segments of about the same size. Collins Aerospace makes systems for aircraft, such as avionics, landing gear, cabins and power systems. Pratt & Whitney makes engines for commercial and military aircraft, such as the Geared Turbofan (GTF) for the Airbus A320neo and the F135 for the F-35 fighter. Raytheon makes missiles, air defense systems and radars, such as Patriot, Standard Missile and AMRAAM. RTX makes money when it sells new equipment, and it makes more money over many years from spare parts, repairs and service of the engines and systems in use. Its 2025 sales were more than $88 billion, and it has more than 180,000 employees. At removed: June added: September 30, 2026, its backlog was removed: $289 added: $340 billion: removed: $170 added: $176 billion commercial and removed: $119 added: $164 billion defense.
- Thesis
- The market prices RTX lower because it removed part of the war premium from defense stocks and because Pratt & Whitney still carries the cost of the GTF engine problem. The stock rose after the strong Q2 2026 report on July 23, 2026, and then it fell about 10% in the month to September 22, 2026. On that day, a report that Iran offered to reopen the Strait of Hormuz made investors expect less demand for missiles, and RTX fell about 3%. Investors also remember the powder metal problem in the GTF engine. Pratt & Whitney expects more A320neo aircraft on the ground than normal through 2026, and it expects a cash cost of about $0.7 billion for this in 2026. For the gap to close, three things must be true. First, the new multi-year missile contracts must become funded orders and keep defense backlog growing: AMRAAM (up to $20.7 billion), SM-6 (up to $24.4 billion) and SM-3 Block IB (up to $6.3 billion) were awarded from September 25 to October 8, 2026. Second, RTX must deliver its removed: raised 2026 removed: outlook: added: outlook, which it raised again on October 20, 2026: organic sales growth of removed: 8% added: 10% to removed: 9% added: 11% and free cash flow of removed: $8.50 added: $9.0 to removed: $8.75 added: $9.2 billion. Third, the number of GTF-powered aircraft on the ground must start to fall, and Pratt & Whitney margins must keep rising. The removed: first test is the Q3 2026 report on October 20, removed: 2026. added: 2026 passed the first test: backlog grew to $340 billion, with $164 billion in defense. The 2027 outlook with the Q4 2026 report in early 2027 is the removed: second added: next test. If these checks pass, the gap can close over the next two to four quarters. The main risk is that a peace in the Middle East and slower US defense funding reduce the missile orders that the market expects.
- Balance sheet
- Cash: removed: $8.3B added: $9.2B Debt: $37.4B Net debt: removed: $29.1B added: $28.2B Interest cover: removed: 6.4× added: 7.3× Undrawn credit line: $5.0B, to August 2028 Debt due within 12 months: removed: $5.5B added: $5.9B Ratings: S&P BBB+ (positive outlook), Moody's Baa1 (positive outlook) RTX funds itself with unsecured notes of the parent company and with cash from its three segments. At removed: June added: September 30, 2026, total debt was $37.4 added: billion: long-term debt of $31.5 billion, added: a current part of $5.7 billion and removed: total debt was 35% added: short-term borrowings of removed: total capitalization, down added: $0.2 billion. Cash was $9.2 billion at September 30, 2026, up from removed: 36% added: $8.3 billion at removed: December 31, 2025. RTX had no commercial paper outstanding at June 30, 2026. removed: It repaid $500 million of notes on February 27, 2026. About 27% of the added: Free cash added: flow was removed: held by foreign subsidiaries. added: $2.1 billion in Q3 2026. Interest cover is operating income divided by added: net interest expense for the first removed: half added: nine months of 2026. added: The $5.0 billion credit line is the last figure from the Q2 2026 filing. In May 2026, S&P changed its outlook to positive, and in February 2026, Moody's changed its outlook to positive. RTX raised its 2026 free cash flow outlook to removed: $8.50 added: $9.0 to removed: $8.75 added: $9.2 billion on removed: July 23, added: October 20, 2026. The sale of Blue Canyon Technologies for $620 removed: million added: million, agreed in July 2026, will add cash when it closes. As of removed: Jun added: Sep 30, 2026.
- Checkpoints
- Oct 20, 2026: Q3 2026 results: defense orders and GTF. removed: Pending. added: Passed. Watch: Organic sales growth near the 8% to 9% outlook, free cash flow on track for $8.50 to $8.75 billion and a higher defense backlog pass; a lower outlook or a new GTF charge fails. added: Outcome: Organic sales grew 12%, defense backlog rose to $164 billion, and RTX raised its 2026 outlook, including free cash flow to $9.0 to $9.2 billion. Jan added: 20, 2027 (estimate): Q4 2026 results: 2027 outlook and GTF fleet. Pending. Watch: A 2027 outlook with sales and free cash flow growth and fewer GTF-powered aircraft on the ground passes; a flat outlook or a GTF fleet plan that slips further into 2027 fails.
- Recent events
- Oct added: 20, 2026: RTX reported Q3 2026 results. Sales were $25.0 billion, up 11%, and up 12% organically. Adjusted EPS was $2.26, up 33%, and this included $0.25 from the recovery of IEEPA tariff costs. Free cash flow was $2.1 billion. New awards were more than $81 billion, and backlog reached $340 billion: $176 billion commercial and $164 billion defense. Pratt & Whitney took a $363 million charge for a customer bankruptcy. RTX raised its 2026 outlook to adjusted sales of $97.0 to $97.5 billion, organic growth of 10% to 11%, adjusted EPS of $7.65 to $7.75 and free cash flow of $9.0 to $9.2 billion. Oct 8, 2026: Raytheon won a multi-year contract for SM-3 Block IB interceptors, valued at up to $6.3 billion. Oct 1, 2026: Raytheon won a five-year contract from the US Navy for Standard Missile-6 interceptors, with two option years, valued at up to $24.4 billion. Sep 29, 2026: RTX said it will report Q3 2026 results on October 20, 2026, before the market opens. Sep 28, 2026: RTX announced a five-year contract, with two option years, for AMRAAM air-to-air missiles, valued at up to $20.7 billion. The Pentagon signed it on September 25. It builds on a February 2026 framework agreement for annual production of at least 1,900 AMRAAM missiles. Sep 22, 2026: Defense stocks fell after a Reuters report that Iran offered to reopen the Strait of Hormuz if the US eases military pressure. RTX fell about 3% in morning trading. It had fallen about 10% in the month before. Sep 15, 2026: RTX named Jill Albertelli president of Pratt & Whitney from January 1, 2027. She replaces Shane Eddy, who retires. She led Pratt & Whitney Military Engines and the F135 engine program. Jul 23, 2026: RTX reported Q2 2026 results. Sales were $24.7 billion, up 14%, and up 16% organically. Adjusted EPS was $1.89, up 21%. Free cash flow was $2.9 billion. Backlog reached $289 billion, up 22% from a year earlier. RTX raised its 2026 outlook to adjusted sales of $95.0 to $96.0 billion, adjusted EPS of $7.10 to $7.25 and free cash flow of $8.50 to $8.75 billion. It also agreed to sell Raytheon's Blue Canyon Technologies business for $620 million. Apr 21, 2026: RTX reported Q1 2026 results. Sales were $22.1 billion, up 9%. Adjusted EPS was $1.78, up 21%. Backlog was $271 billion. RTX raised its 2026 outlook for adjusted sales and adjusted EPS.