Analysis of RTX's Performance Amid Iran War
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Should l Buy RTX?
Source: Yahoo Finance
- Energy Sector Surge: The ongoing war in Iran has led to a surge in crude oil prices, making energy stocks the best-performing sector in the S&P 500, indicating strong market expectations for energy demand that may attract more investor interest.
- Defense Stocks Decline: Contrary to expectations that war would boost defense stocks, RTX's shares have fallen about 5.7% over the past month, which, compared to the nearly 8% drop in the Dow Jones U.S. Select Aerospace & Defense Index, suggests a relative resilience but also reflects cautious market sentiment regarding defense spending.
- Potential Defense Spending Boost: A report from Melius Research estimates that the U.S. will need to spend $6 billion to restock RTX-made ammunition and weapons to pre-conflict levels, indicating that demand for RTX's products may increase after the war, highlighting the company's potential benefits from future defense spending.
- Upcoming Earnings Report: RTX is set to release its first-quarter earnings on April 21, with market expectations for potential surprises, especially given that all three of its primary segments are considered to have durable competitive advantages, which may bolster investor confidence in its future performance.
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Analyst Views on RTX
Wall Street analysts forecast RTX stock price to fall
14 Analyst Rating
9 Buy
5 Hold
0 Sell
Moderate Buy
Current: 202.810
Low
168.00
Averages
195.77
High
215.00
Current: 202.810
Low
168.00
Averages
195.77
High
215.00
About RTX
RTX Corporation is an aerospace and defense company, which provides advanced systems and services for commercial, military, and government customers worldwide. The Company operates through three segments: Collins Aerospace, Pratt & Whitney, and Raytheon. Collins Aerospace segment provides technologically advanced aerospace and defense products and aftermarket service solutions for civil and military aircraft manufacturers, commercial airlines, and regional, business and general aviation, as well as for defense and commercial space operations. The Pratt & Whitney segment supplies aircraft engines for commercial, military, business jet, and general aviation customers. The Raytheon segment provides defensive and offensive threat detection, tracking and mitigation capabilities for the United States and foreign government and commercial customers. The Raytheon designs, develops, and provides advanced capabilities in integrated air and missile defense, smart weapons, missiles and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Optimized Space Utilization: By deploying a convertible console in the last row of widebody aircraft, SkyNook reclaims commonly underutilized space, allowing passengers to safely secure car seats, bassinets, or pet carriers, thereby improving the overall travel experience.
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- Optimized Space Utilization: By deploying a convertible console in the last row of widebody aircraft, SkyNook reclaims commonly underutilized space, allowing passengers to safely secure car seats, bassinets, or pet carriers, thereby improving the overall travel experience.
- Enhanced Privacy and Comfort: The system features a privacy divider that not only provides a visual barrier from the aisle but also dampens sound from the galley and lavatory areas, significantly enhancing passenger privacy and comfort, particularly for families and those with special needs.
- Industry Leadership: This award brings Collins Aerospace's total to 16 Crystal Cabin Awards in the program's 20-year history, further solidifying its leadership position in the global aerospace and defense industry and demonstrating its commitment to future aviation technologies.
See More
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- Liquidation Risk: Spirit Airlines could face liquidation as early as this week due to its second bankruptcy in less than a year and the added pressure from rising fuel prices, significantly worsening its financial situation.
- Bankruptcy Restructuring Challenges: Although Spirit aimed to exit bankruptcy this spring, the surge in fuel costs and intensified market competition pose substantial challenges to its restructuring plans, potentially impacting its future operational capabilities.
- Deteriorating Industry Environment: Post-pandemic, airlines are grappling with soaring wages and costs, shifting customer preferences, and an oversupply of domestic flights leading to falling airfares, making it difficult for Spirit to regain profitability in this challenging landscape.
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See More
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- Significant Contract Value: Raytheon has been awarded a not-to-exceed $234.8 million contract for the AMRAAM Extended Range (ER) transition to production, indicating strong demand and ongoing investment in the defense sector.
- Production Transition Support: This contract supports the necessary activities to transition AMRAAM ER into full-rate production, which is expected to enhance Raytheon's competitiveness in the missile systems market and meet future defense requirements.
- Project Location and Timeline: The work will be performed in Tucson, Arizona, and is expected to be completed by April 13, 2030, providing Raytheon with a clear project timeline and resource allocation opportunities.
- Funding Assurance: At the time of the award, $61.6 million in Foreign Military Sales funds were obligated, ensuring liquidity for the project and reflecting the U.S. government's trust and support for Raytheon's products.
See More
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- Successful Flight Test: Raytheon has successfully completed the first flight test of its RAIVEN sensor system aboard a UH-60 Black Hawk, marking an early milestone for the next-generation electro-optical and infrared platform, showcasing its technological prowess in advanced sensing and survivability systems.
- Comprehensive Situational Awareness: The air-cooled system integrates three sensors, providing 270-degree situational awareness in complete darkness while successfully mapping varied terrains including urban areas, marshland, and coastlines, addressing the military's urgent need for battlefield awareness.
- Significant Market Potential: If widely adopted, RAIVEN could support future revenue growth through upgrades, new platform integrations, and international sales, particularly as defense budgets increasingly favor high-tech surveillance and targeting systems.
- Modular Design Benefits: The RAIVEN system is part of a broader family of modular EO/IR products with an open architecture that allows integration with existing systems and future upgrades, with configurations expandable to a full 360-degree field of view, enhancing threat detection and pilot navigation capabilities.
See More
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- New Investment Opportunities: SpaceX's planned IPO in June 2026, targeting a valuation of $1.75 trillion, is set to become the largest in history, attracting participation from a syndicate of 21 banks including Morgan Stanley and Goldman Sachs, potentially transforming the space investment landscape.
- Accelerated Testing through Partnership: Starfighters Space has signed a Technical Interchange Agreement with Blackstar Orbital to utilize its F-104 aircraft platform for flight testing reusable hypersonic space systems, with operations expected to commence in Q4 FY26, driving rapid advancements in aerospace technology.
- Strong Financial Performance: GE Aerospace is expected to report Q1 2026 earnings based on a solid Q4 performance of $1.57 EPS and $11.9 billion in revenue, benefiting from a record $190 billion backlog and robust demand for defense contracts, showcasing the company's growth potential in the aerospace sector.
- Surging Market Demand: The global space economy is projected to reach $1.8 trillion by 2035, driven by increased government budgets and expanding commercial applications, with Starfighters' partnership with Blackstar aligning perfectly with these growth trends, enhancing the company's critical position in space infrastructure.
See More
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- Market Performance Analysis: Despite concerns over defense capability needs due to the Middle East conflict, RTX (formerly Raytheon) has not seen any gains since the onset of the conflict, indicating market caution regarding its high valuation, with a current P/E ratio of 30 suggesting insufficient investor confidence in future growth.
- Backlog Situation: RTX's backlog stands at $268 billion, significantly exceeding last year's revenue of $88.6 billion; however, this figure may take years to convert into reportable revenue, reflecting the company's slow growth amid capacity constraints.
- Industry Outlook: While the defense industry is typically government-funded and slow-growing, increased military modernization investments by countries like Greece may benefit RTX in the long term, especially as nations ramp up defense budgets in response to regional threats.
- Investment Caution: Analysts set a target price of $219 for RTX, offering less than 10% upside from the current price, and with a dividend yield of only 1.4%, investors should exercise caution, considering the presence of more attractive investment opportunities in the market.
See More
