RTX
RTX Corporation$206.52
Sell
Target $165.21
Report: Mar 08, 2026Industrials • Aerospace & Defense • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$206.52-20.0%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$165.21
(20% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$214.50
52 Week Low$112.27
Avg. 3 Month Volume6.19M
Efficiency
LTM Gross Margin20.1%
LTM EBITDA Margin16.4%
LTM EBIT Margin11.4%
LTM Operating Margin10.0%
LTM ROA4.0%
LTM ROE10.6%
LTM ROIC16.0%
LTM ROCE9.0%
Capital Structure
Market Cap (MM)$258.9B
Enterprise Value (MM)$291.0B
Shares Outstanding1.34B
Total Debt (MM)$39.51B
Cash & Equivalents (MM)$7.43B
LTM Net Debt (MM)$32.07B
LTM Net Debt/EBITDA2.2x
Growth
TTM Rev. Growth9.7%
Last 3-Yr Rev. CAGR9.7%
Last 3-Yr EBITDA CAGR8.8%
Last 3-Yr EPS CAGR12.6%
Valuation
Street Target Price$219.20
LTM EV/Revenue3.3x
LTM EV/Gross Profit16.4x
LTM EV/EBIT28.7x
LTM EV/EBITDA20.0x
LTM P/E38.5x
LTM EV/FCF36.6x
LTM P/FCF32.6x
LTM P/TB3.0x
LTM P/B4.0x
Dividend Yield1.4%
Payout Ratio53.1%
Executive SummarySituation: Current price is $206.52 versus fair value $165.21 (-20.0% expected return), and valuation confidence is stable. Debate: Bull case depends on Tariff Escalation and Margin Compression: A further increase in international tariffs would directly hit the bottom line, as RTX has already disclosed an $850M net impact in 2025. Bear case centers on Supply Chain Disruption (Rare Earths): The U.S. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
A record $268B backlog and 1.56 book-to-bill ratio provide multi-year revenue visibility; the commercial aftermarket is surging with 12-16% organic growth as global air travel recovers; and the 'Core Operating System' is successfully driving operating margins to a decade-high 10.0%.
Bear Case
Earnings quality is poor, with 'adjusted' figures ignoring $0.85B in recurring tariff costs and $0.3B in powder-metal compensation; the balance sheet is hollowed out with a -$19.9B tangible book value; and insiders are aggressively divesting shares, signaling that the current valuation is a cyclical peak.
Key Catalysts
Near-Term (0-6 months)Impact: High
Tariff Escalation and Margin Compression: A further increase in international tariffs would directly hit the bottom line, as RTX has already...
Mid-Term (6-18 months)Impact: Critical
GTF Remediation Delays: Any setback in the powder metal inspection program, which currently targets a 30% growth in MRO output, would lead t...
Long-Term (18+ months)Impact: Moderate
RTX is at a critical juncture as it tests all-time highs while insiders have sold $46.7M in stock over the last 12 months, creating a rare w...
Primary Risks
Concern: High
Supply Chain Disruption (Rare Earths): The U.S. mandate to eliminate Chinese rare earth materials by 2027 could lead to significant producti...
Concern: High
De-rating Risk: As a Mature Compounder, the primary risk is a multiple contraction from the current 21.3x EV/EBITDA toward the 5-year averag...
Concern: Medium
Stewardship is currently in a 'Trust but Verify' phase. The governance outcome tree suggests: 1. Status Quo: Management continues to buy bac...
Recent Activity
2025-10-21SEC Filing (8-K)
+7.67%RTX reports Q3 2025 results with 12% sales growth and raises full-year outlook
2025-04-22SEC Filing (8-K)
-9.81%RTX reports Q1 2025 results with 8% organic sales growth and 10% adjusted EPS growth.
2025-04-09Market Movement
+6.62%Market/Sector Move +6.62%
2024-07-25SEC Filing (8-K)
+8.24%RTX reports Q2 2024 results with 8% sales growth and increases full-year outlook
2024-01-23SEC Filing (8-K)
+5.33%RTX reports Q4 2023 results with 10% sales growth and announces 2024 outlook
Valuation Table
9.8/10Decision Grade
Scenario Range
$127
Bear
$168
Base
$198
Bull
$207