Corporate Overview
RTX provides products and services to commercial, military, and government customers through three primary segments:
- Collins Aerospace, which supplies avionics, interiors, and other integrated systems for aircraft platforms.
- Pratt & Whitney, the manufacturer of commercial and military jet engines.
- Raytheon, focused on missiles, sensors, and integrated defense solutions.
Each unit contributes to a diversified revenue base that has allowed RTX to navigate cyclical swings in individual end markets. According to filings available through the U.S. Securities and Exchange Commission, the company continues to allocate capital toward research, development, and share repurchases while maintaining investment-grade credit ratings.
Fourth-Quarter Highlights
RTX shares rose 3.7% on January 27 after the company announced fourth-quarter 2025 adjusted earnings of $1.55 per share, topping Wall Street expectations. Revenue for the quarter reached $24.24 billion, also ahead of consensus forecasts.
Management emphasized stronger cash generation as a key driver of the quarter’s outperformance. Free cash flow came in at $3.2 billion, bringing full-year 2025 free cash flow to $7.9 billion. The annual figure represented a year-over-year increase of $3.4 billion, highlighting improved working-capital management and higher profitability across all three operating segments.
Guidance and Analyst Expectations
For full-year 2026, RTX is projecting adjusted earnings in the range of $6.60 to $6.80 per share and free cash flow between $8.25 billion and $8.75 billion. The midpoint of the earnings forecast implies continued margin expansion even as the company navigates broader supply-chain pressures affecting the aerospace sector.
Analysts covering the stock expect adjusted earnings of approximately $6.67 per share for the fiscal year ending December 2026, representing a 6% increase from the prior year. RTX has exceeded consensus earnings estimates in each of the most recent four quarters, reinforcing confidence in management’s ability to meet—or beat—guidance.
Wall Street Ratings
Among the 22 research firms tracking RTX, the shares carry a consensus rating of “Moderate Buy.” That assessment is based on 13 Strong Buy opinions, one Moderate Buy, and eight Hold recommendations. The average twelve-month price target stands at $201.86.
On January 28, UBS analyst Gavin Parsons lifted his price objective to $208 from a previous level while reiterating a Neutral rating. The highest target on the Street, at $230, implies potential upside of roughly 12.4% from recent trading levels.
Segment Drivers
Collins Aerospace continues to benefit from the ongoing recovery in commercial air travel, which supports demand for avionics upgrades and aftermarket services. Pratt & Whitney is seeing increased engine deliveries as key commercial airframe programs ramp production; however, the segment remains focused on addressing cost and durability challenges tied to next-generation geared turbofan engines. The Raytheon division is positioned for growth amid elevated global defense spending and demand for advanced missile systems and radar solutions.
Combined, these businesses provide RTX with revenue diversification that helps mitigate program-specific risks. Management has indicated that cost-synergy targets from the 2020 merger that created the current RTX structure remain on schedule.
Cash Flow and Capital Allocation
RTX’s 2025 cash-flow performance delivered the strongest annual free cash flow since the merger, supported by higher earnings, lower capital-expenditure intensity, and improved collections. Looking ahead, management intends to deploy cash toward dividend increases, share repurchases, and continued investment in research and development.
The company has not altered its long-term capital allocation framework, which targets a balanced approach between returning cash to shareholders and funding technology initiatives considered critical to maintaining competitive advantages in military propulsion, hypersonics, and cybersecurity.
Competitive Landscape
The aerospace and defense sector remains highly competitive, with peers such as Boeing, Lockheed Martin, and Northrop Grumman also pursuing large defense contracts and commercial opportunities. RTX’s integrated platform, spanning engines to missile defense systems, positions the company to compete across multiple procurement cycles and international markets.
Industry analysts continue to monitor supply-chain dynamics, raw-material inflation, and potential delays in government contract awards, all of which could influence margin trends. RTX’s diversified backlog and established supplier relationships offer some insulation, but management has acknowledged ongoing vigilance in cost-containment efforts.
Outlook
RTX enters 2026 with a combination of rising commercial aerospace volume, steady defense demand, and a focus on cash-flow generation. The company’s outlook, supported by consensus analyst estimates and recent price-target revisions, suggests continued interest from both growth and income-oriented investors. Whether RTX can maintain its momentum will depend on execution in its key programs and the broader macroeconomic environment.
Crédito da imagem: T_Schneider via Shutterstock
