Stock of the Day

September 25, 2023

RTX (RTX)

$123.23
-$1.88 (-1.5%)
Market Cap: $166.66B

About RTX

RTX Corporation, an aerospace and defense company, provides systems and services for the commercial, military, and government customers in the United States and internationally. It operates through three segments: Collins Aerospace, Pratt & Whitney, and Raytheon. The Collins Aerospace Systems segment offers aerospace and defense products, and aftermarket service solutions for civil and military aircraft manufacturers and commercial airlines, as well as regional, business, and general aviation, defense, and commercial space operations. This segment also designs, produces, and supports cabin interior, including oxygen systems, food and beverage preparation, storage and galley systems, and lavatory and wastewater management systems; battlespace, test and training range systems, crew escape systems, and simulation and training solutions; information management services; and aftermarket services that include spare parts, overhaul and repair, engineering and technical support, training and fleet management solutions, and asset and information management services. Its Pratt & Whitney segment supplies aircraft engines for commercial, military, business jet, and general aviation customers; and produces, sells, and services military and commercial auxiliary power units. The Raytheon segment provides defensive and offensive threat detection, tracking, and mitigation capabilities for U.S., foreign government, and commercial customers. The company was formerly known as Raytheon Technologies Corporation and changed its name to RTX Corporation in July 2023. RTX Corporation was incorporated in 1934 and is headquartered in Arlington, Virginia.

RTX Bull Case

Here are some ways that investors could benefit from investing in RTX Co.:

  • RTX Co. recently reported earnings per share (EPS) of $1.54, exceeding analysts' expectations of $1.35, indicating strong financial performance and potential for growth.
  • The company has announced a quarterly dividend of $0.63 per share, which translates to an annualized dividend of $2.52 and a yield of approximately 2.01%. This can provide a steady income stream for investors.
  • RTX Co. has a market capitalization of $168.29 billion, showcasing its size and stability in the aerospace and defense sector, which can be attractive to long-term investors.
  • The stock is currently trading at $126.33, which is near its one-year high of $132.43, suggesting strong market confidence and potential for further appreciation.
  • Analysts have given RTX Co. an average rating of "Moderate Buy" with a target price of $163.07, indicating positive sentiment and potential upside for investors.

RTX Bear Case

Investors should be bearish about investing in RTX Co. for these reasons:

  • The company's dividend payout ratio is currently 70.99%, which may raise concerns about sustainability, as a high payout ratio can limit reinvestment in growth opportunities.
  • Insider selling has been observed, with an executive vice president selling 14,031 shares, which could signal a lack of confidence in the company's short-term prospects.
  • RTX Co. has a relatively high price-to-earnings (P/E) ratio of 35.65, which may indicate that the stock is overvalued compared to its earnings, potentially leading to a price correction.
  • The company has a current ratio of 0.99, which is below 1, suggesting that it may have difficulty meeting its short-term liabilities, raising liquidity concerns.
  • With a beta of 0.82, RTX Co. is less volatile than the market, which may limit potential gains during bullish market conditions, making it less attractive for aggressive investors.

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