Start here if you're new
what it is
RTX builds aircraft parts and engines, plus missile and defense systems, then gets paid for years to keep them running.
how it gets paid
Last year Rtx made $88.6B in revenue. Collins Aerospace was the main engine at $28.8B, or 32% of sales.
why it's growing
Revenue grew 9.7% last year. A backlog of $268 billion has never been higher and dramatically improves revenue visibility for the next three years.
what just happened
RTX posted $64.4B in latest-quarter revenue and beat EPS estimates with $1.55 versus $1.47 expected.
At a glance
A balance sheet — strong enough to weather a downturn
55/100 earnings predictability — expect surprises
31.9x trailing p/e — you're paying up for this one
1.5% dividend yield — cash in your pocket every quarter
15.0% return on capital — nothing to write home about
xvary composite: 79/100 — average
What they do
RTX builds aircraft parts and engines, plus missile and defense systems, then gets paid for years to keep them running.
RTX wins because your airplane engine and your missile shield are both sticky purchases. Switching costs (changing suppliers after installation) → painful recertification and retraining → customers stay put. That helps RTX turn $88.6 billion in annual revenue into a 20.5% operating margin, while its Patriot franchise and installed engine base keep service dollars coming back.
How they make money
$88.6B
annual revenue · their business grew +9.7% last year
Collins Aerospace
$28.8B
+10.0%
Pratt & Whitney
$28.1B
+13.0%
Raytheon
$26.8B
+6.0%
Other and eliminations
$4.9B
flat
The products that matter
missile systems and production capacity
Raytheon
$115M Alabama facility expansion
Capacity is a product here. RTX is spending $115M to expand an Alabama integration site and ramp missile output. In plain English: demand is not the issue. Delivering on time is.
capacity bet
commercial and military aircraft engines
Pratt & Whitney
+25% vs. prior year in Q4
Pratt & Whitney was the growth engine in the quarter. If you want the number that mattered, start there. Fast engine growth plus years of service revenue is why this business gets treated as more than a defense contractor.
growth driver
avionics, interiors, and aerospace systems
Collins Aerospace
10.5% operating margin
A 10.5% operating margin is not flashy. It is useful. Collins adds steadier aerospace content while Pratt grabs the headlines. Same company. Different tempo.
margin support
Key numbers
31.9x
trailing p/e
You are paying 31.9 times last year's earnings for an industrial defense company. That's a premium price, not a bargain-bin missile stock.
$88.6B
annual revenue
Scale matters here. RTX can spread engineering, manufacturing, and service costs across a revenue base larger than many countries' defense budgets.
20.5%
operating margin
Operating margin → profit after running the business → so what: RTX keeps about 20 cents from every sales dollar before interest and taxes.
15.0%
return on capital
Return on capital → profit earned on money invested → so what: RTX turns every $1 invested in the business into about $0.15 of operating profit.
Financial health
A
strength
- balance sheet grade A — very strong financial position
- risk rank 2 — safer than 80% of stocks
- price stability 90 / 100
- long-term debt $34.3B (11% of capital)
- net profit margin 12.6% — keeps 13 cents of every dollar in revenue
- return on equity 20% — $0.20 profit for every $1 investors have put in
A — among the top-rated companies for balance sheet quality.
Total return vs. market
You invested $10,000 in RTX 3 years ago → it's now worth $21,290.
The index would have given you $13,880.
source: institutional data · total return
What just happened
beat estimates
RTX posted $64.4B in latest-quarter revenue and beat EPS estimates with $1.55 versus $1.47 expected.
The latest reported quarter showed broad strength across Pratt & Whitney, Collins Aerospace, and Raytheon. The cleaner fact is this: revenue rose 186% vs. prior year in the reported quarter, while the most recent EPS print beat consensus by 5.44%.
$21.6B
revenue
$3.77
eps
5.44%
eps surprise
the number that mattered
The 5.44% EPS beat matters most because the stock already trades at 31.9x earnings, so RTX needs clean beats to justify that premium.
-
shares of rtx reached an all-time high in early february.
-
a strong showing in the fourth quarter of 2025, highlighted by a revenue beat of more than $1 billion, coupled with better-than-expected earnings, pushed the quotation to new heights north of the $200 line.
-
top-line strength was evident across the board, as the three operating segments, pratt & whitney, collins aerospace, and raytheon, posted increases versus the prior year of 25%, 8%, and 7%, respectively.add to this, the aerospace and defense market continues to heat up and prospects for the coming years are bright.
-
for 2026, we estimate top-line growth of just over 5%, translating into earnings gains in the vicinity of 8%-9%.a backlog of $268 billion has never been higher and dramatically improves revenue visibility for the next three years. with that, management has conservatively projected $92.0 billion to $93.0 billion in revenue for this year with share earnings in a bracket from $6.60 to $6.80. for our part, we are placing our top-line target slightly above the recommended range, while looking for earnings to come in at the apex of the provided spread. demand for commercial original equipment and aftermarket services on the aerospace front should remain stout. too, defense systems are being beefed up during these troubled times, and the company is enjoying new growth avenues in surveillance and targeting technologies.
-
the road to 2029-2031 is likely to be paved with record revenue and earnings figures.
source: company earnings report, 2026
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What could go wrong
RTX's bull case is simple enough to fit on a napkin: convert the $268B backlog, keep Pratt & Whitney hot, and let defense demand do the rest. The catch is that all three depend on parts, production timing, and government budgets.
high
Backlog conversion slips because parts do not show up on time
RTX already says supply chain constraints can delay conversion despite strong demand. That is the main operational risk hiding inside the big backlog number.
If delays persist, the 5–6% organic growth target for 2026 gets harder to hit and the stock's premium multiple loses cover.
med
Government budgets still control a big part of the story
60%+ of revenue comes from government sources. Demand can look healthy on paper while appropriations, program timing, or contract pacing move the cash and revenue around.
Policy changes put $53B+ of annual revenue sensitivity in someone else's calendar, not yours.
med
Legal noise is smaller than the business, but still noise
A federal judge dismissed the securities class action tied to alleged defect concealment. That helps. Related cases still mean fees, headlines, and management attention spent somewhere other than execution.
The cited $26.5M settlement exposure is not a balance-sheet threat. The bigger issue is distraction if legal headlines pile up again.
What would change our mind: if 2026 revenue falls below the $92.0B–$93.0B guide or EPS lands below $6.60 because backlog is not converting, this stops being a premium-quality execution story and starts looking like a premium-priced promise.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
Q1 2026 earnings report
Apr 28, 2026 — the street looks for $21.41B in revenue and $1.52 in EPS. After a clean Q4 beat, expectations are no longer lying on the floor.
backlog
Conversion, not just backlog size
$268B in backlog against $88.6B in annual revenue is impressive. The test is simpler: does 2026 revenue actually land inside the $92.0B–$93.0B range.
segment mix
Does Pratt stay the growth engine
Pratt & Whitney grew 25% in Q4, versus 8% for Collins and 7% for Raytheon. If Pratt cools sharply, the growth story gets less special fast.
policy risk
Government timing still matters
With 60%+ of revenue tied to government sources, budget friction does not have to kill demand to hurt the quarter. It just has to move the timing.
Analyst rankings
earnings predictability
55 / 100
in human-speak, this is stable enough to model and messy enough to surprise you.
price stability
90 / 100
the stock has traded more like a steady industrial than a panic-prone cyclical.
balance sheet quality
A
strong finances give you room for execution stumbles. They do not erase valuation risk.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 1,403 buyers vs. 1,281 sellers in 3q2025. total institutional holdings: 1.1B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$129
$237
$200
current price
$183
target midpoint · 9% from current · 3-5yr high: $250 (+25% · 7% ann'l return)
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