L3Harris to Separate Missile Division; Lockheed and Three Other Stocks May Follow Suit.
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 14 2026
0mins
Source: Barron's
- Emerging Trend: Investors in the global defense industry are now considering the trend of deconsolidation alongside the impact of recent policy changes.
- Impact of Policy Changes: Several dramatic policy changes are influencing investor sentiment and strategies within the defense sector.
- Industry Dynamics: The shift towards deconsolidation suggests a potential restructuring of companies within the defense industry.
- Investor Considerations: Investors must navigate both the implications of policy changes and the emerging trend of deconsolidation in their decision-making processes.
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Analyst Views on RTX
Wall Street analysts forecast RTX stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for RTX is 195.77 USD with a low forecast of 168.00 USD and a high forecast of 215.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
14 Analyst Rating
9 Buy
5 Hold
0 Sell
Moderate Buy
Current: 196.510
Low
168.00
Averages
195.77
High
215.00
Current: 196.510
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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- Production Support: This contract supports the production of 138 propulsion systems for the U.S. Air Force, Marine Corps, and Navy, while also catering to non-U.S. Department of Defense partners and Foreign Military Sales customers, highlighting RTX's influence in international markets.
- Funding Allocation: At the time of the award, $35 million in fiscal 2025 aircraft procurement funds, approximately $26 million in additional fiscal 2025 aircraft procurement funds, around $42 million from non-U.S. DOD partners (Navy), and about $126 million in FMS funds will be obligated, ensuring ample project financing.
- Project Completion Timeline: Work under this contract is expected to be completed by May 2031, indicating RTX's commitment and capability in long-term defense projects, further solidifying its position in the defense industry.
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- Potential $1.5 Trillion Budget: At a recent Defense Outlook Forum, retired Gen. Arnold Punaro expressed optimism that the U.S. defense budget could grow to $1.5 trillion, representing a roughly 50% increase from fiscal 2026 levels, although analysts remain cautious about the feasibility of such growth.
- AI and Automation in Warfare: The Department of Defense emphasizes the increasing importance of automation, autonomy, and artificial intelligence in warfare, pushing contractors to enhance output, reduce costs, and build a lasting software advantage, which could enable defense firms to achieve margins similar to those in commercial aerospace or technology sectors.
- Valuation Concerns for Defense Stocks: Despite a nearly 100% rally in defense stocks raising valuation concerns, this surge appears grounded in fundamentals, as governments commit to multi-year budget increases, geopolitical tensions remain high, and global missile and munitions inventories are depleted, making defense a clear policy priority for the U.S. and NATO allies.
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- Technological Innovation Goals: The first phase of the project will focus on developing a 'smart spectrum manager' capable of identifying radar activity and predicting potential interference within seconds, significantly enhancing the coexistence capabilities of radar and 5G networks while reducing operational risks.
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See More
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- Contract Value: RTX has been awarded a not-to-exceed $230 million fixed-price-incentive contract to procure long-lead materials, parts, and components for the F135 Lot 20 propulsion system, ensuring timely delivery schedules.
- Production Support: This contract supports the production of 138 propulsion systems for the U.S. Air Force, Marine Corps, and Navy, while also catering to non-U.S. Department of Defense partners and Foreign Military Sales customers, highlighting RTX's influence in international markets.
- Funding Allocation: At the time of the award, $35 million in fiscal 2025 aircraft procurement funds, approximately $26 million in additional fiscal 2025 aircraft procurement funds, around $42 million from non-U.S. DOD partners (Navy), and about $126 million in FMS funds will be obligated, ensuring ample project financing.
- Project Completion Timeline: Work under this contract is expected to be completed by May 2031, indicating RTX's commitment and capability in long-term defense projects, further solidifying its position in the defense industry.
See More
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- Rapid Defense Budget Growth: The U.S. defense budget has surpassed $1 trillion, with NATO countries expected to increase core defense spending to 3.5% of GDP by 2035, potentially adding around $370 billion in spending from non-U.S. NATO members, indicating a robust growth trend in defense budgets.
- Potential $1.5 Trillion Budget: At a recent Defense Outlook Forum, retired Gen. Arnold Punaro expressed optimism that the U.S. defense budget could grow to $1.5 trillion, representing a roughly 50% increase from fiscal 2026 levels, although analysts remain cautious about the feasibility of such growth.
- AI and Automation in Warfare: The Department of Defense emphasizes the increasing importance of automation, autonomy, and artificial intelligence in warfare, pushing contractors to enhance output, reduce costs, and build a lasting software advantage, which could enable defense firms to achieve margins similar to those in commercial aerospace or technology sectors.
- Valuation Concerns for Defense Stocks: Despite a nearly 100% rally in defense stocks raising valuation concerns, this surge appears grounded in fundamentals, as governments commit to multi-year budget increases, geopolitical tensions remain high, and global missile and munitions inventories are depleted, making defense a clear policy priority for the U.S. and NATO allies.
See More
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Job Market Overview: The recent jobs report appears strong, but there are underlying concerns regarding the impact of artificial intelligence on employment.
Sector Vulnerability: Certain professions, like software development, may be more at risk from AI advancements compared to others, such as nursing.
See More
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- Celestica Upgrade: Analyst Danil Sereda upgraded Celestica (CLS) from Hold to Buy following strong Q4 results and record hyperscaler bookings, projecting CCS segment revenue to reach $7 billion by 2027, indicating robust growth potential in the market.
- ON Semiconductor Rating Change: Tech Stock Pros upgraded ON Semiconductor (ON) from Sell to Hold, noting mixed Q4 results but signs of stabilization in automotive and industrial markets, suggesting the company is moving towards a healthier position post-inventory correction, although EV demand recovery remains critical.
- RTX Corporation Downgrade: The Value Portfolio downgraded RTX Corporation (RTX) from Buy to Sell, citing a high P/E ratio near 30x with only mid-single-digit growth projected, alongside political risks that could impact margins and future returns for defense contractors.
- Varonis Systems Downgrade: May Investing Ideas downgraded Varonis Systems (VRNS) from Buy to Hold, highlighting decelerating SaaS ARR growth and stagnant net retention rates, indicating that tangible improvements are necessary before the stock becomes attractive again.
See More
El Paso Airport Shutdown Highlights Trends in Military Drone Technology.
Drone Technology in Military: Drone technology is increasingly important in military strategies, particularly for the United States.
Focus on Dominance: The development of drone dominance is a key objective for America, highlighting its significance in modern warfare.
Impact on Travelers: The emphasis on drone technology may lead to complications for travelers, suggesting potential disruptions.
Current Trends: The growing interest in drones reflects broader trends in military innovation and defense strategies.
See More
RTX Initiates Military Radar Protection Project Under U.S. Defense Contract
- Project Background: RTX's BBN Technologies has commenced work under a U.S. defense contract aimed at safeguarding military radar systems, particularly as key radio frequencies are opened for commercial 5G use, showcasing the company's technical prowess in the defense sector.
- Technological Innovation Goals: The first phase of the project will focus on developing a 'smart spectrum manager' capable of identifying radar activity and predicting potential interference within seconds, significantly enhancing the coexistence capabilities of radar and 5G networks while reducing operational risks.
- Collaborative Network: RTX will collaborate with various defense contractors, telecom specialists, and academic institutions, including Raytheon Advanced Technology and Ericsson Federal Technologies Group, aiming for a 50% increase in usable 5G capacity and a 20-decibel reduction in radar interference, thereby enhancing the project's market competitiveness.
- Execution Locations and Impact: The project will be executed across multiple U.S. states, including Massachusetts, Texas, and Virginia, and if successful, it could help alleviate the long-standing tensions between national security users and commercial carriers competing for spectrum access, thereby driving the growth of 5G demand.
See More
