RTX
RTX
Hold 2026-04-01
Model
DCF
Price at Report
$192.90
Base IV
$142.73
Bear IV
$81.41
Bull IV
$219.47
Entry Zone: 85-131 · Sell Above: 187
Bore Family Office
Valuation Report — RTX Corporation (RTX) • April 1, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 7.90% • Current Price: $192.90
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
RTX Corporation is one of the world's largest aerospace and defense companies, formed from the 2020 merger of United Technologies and Raytheon Company. It operates three segments: Collins Aerospace (avionics, interiors, engine systems), Pratt & Whitney (commercial and military jet engines), and Raytheon (missiles, air defense systems, sensors & C2). RTX holds a $217B order backlog providing strong multi-year revenue visibility.
RTX benefits from two powerful secular tailwinds: the commercial aviation supercycle (post-COVID recovery of air travel driving aftermarket demand) and accelerating global defense spending driven by NATO realignment and Middle East tensions. The company's strategic position in hypersonics, air defense (Patriot/LTAMDS), and next-gen engines makes it a preferred partner for both DoD and allied governments.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Collins Aerospace | $28,500M | 32% | +10.0% | — | Avionics, interiors, engines — strong commercial aftermarket growth |
| Pratt & Whitney | $26,800M | 30% | +12.0% | — | Commercial/military engines; GTF remediation headwind fading |
| Raytheon | $33,300M | 38% | +8.0% | — | Missiles, air defense, sensors; record backlog on elevated defense budgets |
| Blended Growth Rate | — | 100% | +9.8% | — | Weighted avg across segments |
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 9.2% | 8–12% adequate |
| FCF Margin | 9.0% | 5–10% adequate |
| Debt / EBITDA | 2.9x | 2–4x moderate |
| Revenue Trend | Growing 3yr | 3-year directional trend |
| FCF Margin Trend | Expanding | Directional margin trajectory |
| Analyst Revisions | Upward revisions | Last 90 days consensus direction |
✅ Quality profile supports the valuation
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $64,388 | $67,074 | $68,920 | $80,738 | $88,603 |
| Rev YoY Growth | — | +4.2% | +2.8% | +17.1% | +9.7% |
| Gross Margin | 19.4% | 20.4% | 17.5% | 19.1% | 20.1% |
| EBITDA ($M) | $9,693 | $9,612 | $7,772 | $10,902 | $13,678 |
| EBITDA Margin | 15.1% | 14.3% | 11.3% | 13.5% | 15.4% |
| Operating Income ($M) | $5,136 | $5,504 | $3,561 | $6,538 | $9,300 |
| Operating Margin | 8.0% | 8.2% | 5.2% | 8.1% | 10.5% |
| Net Income ($M) | $3,864 | $5,197 | $3,195 | $4,774 | $6,732 |
| Net Margin | 6.0% | 7.7% | 4.6% | 5.9% | 7.6% |
| EPS (diluted) | $2.56 | $3.50 | $2.23 | $3.55 | $4.96 |
| Free Cash Flow ($M) | $5,008 | $4,880 | $5,468 | $4,534 | $7,940 |
| Annual DPS | $2.005 | $2.160 | $2.320 | $2.480 | $2.670 |
| Total Debt ($M) | $33,142 | $33,500 | $45,239 | $42,893 | $39,506 |
💹 Capital Return & Share Count Analysis
Net Share Change
-11.1% (2021→2025)
📉 Net reduction — buybacks exceed issuances
EPS Amplification
EPS grew +93.8% vs net income +74.2% over the period — +19.5pp of EPS growth amplified by share reduction.
| Year | Diluted Shares (M) | YoY Change | Buyback Spend ($M) | Buyback Yield |
|---|---|---|---|---|
| 2021 | 1509.0M | — | $2,327 | 0.8% |
| 2022 | 1486.0M | -1.5% | $2,803 | 1.0% |
| 2023 | 1435.0M | -3.4% | $12,870 | 4.6% |
| 2024 | 1344.0M | -6.3% | $444 | 0.2% |
| 2025 | 1342.0M | -0.1% | $50 | 0.0% |
RTX executed a massive $12.9B buyback in 2023 using proceeds from the Collins/Pratt divestment program following the Raytheon merger. Buybacks returned to minimal levels in 2024-25 as the company prioritized debt reduction and GTF remediation costs. Share count has declined ~11% since 2021. Management is committed to resuming buybacks as FCF improves and debt is reduced toward target.
📈 DCF Scenarios
$81
🔴 Bear
$143
📊 Base
$219
🚀 Bull
$192.90
Current Price
$193
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 4.0% | 3.0% | 2.0% | 7.90% | $81 | ▼57.8% |
| 📊 Base | 10.0% | 6.0% | 2.5% | 7.90% | $143 | ▼26.0% |
| 🚀 Bull | 14.0% | 8.0% | 3.0% | 7.90% | $219 | ▲13.8% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 4.0% | Stage 2: 3.0% | Terminal: 2.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $7.60B | $7.04B | $7.04B |
| Year 2 ✦ | Stage 1 | $7.90B | $6.79B | $13.83B |
| Year 3 ✦ | Stage 1 | $8.20B | $6.53B | $20.36B |
| Year 4 ✦ | Stage 1 | $8.50B | $6.27B | $26.63B |
| Year 5 ✦ | Stage 1 | $8.80B | $6.02B | $32.64B |
| Year 6 | Stage 2 | $9.06B | $5.74B | $38.39B |
| Year 7 | Stage 2 | $9.34B | $5.48B | $43.87B |
| Year 8 | Stage 2 | $9.62B | $5.23B | $49.10B |
| Year 9 | Stage 2 | $9.90B | $5.00B | $54.10B |
| Year 10 | Stage 2 | $10.20B | $4.77B | $58.87B |
| Terminal | — | TV=$176.4B | PV(TV)=$82.5B (58% of EV) | EV=$141.3B |
| Intrinsic Value | — | — | EV $141.3B − Net Debt → Equity / Shares | $81 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (7.90%) to get its present value. After Year 10, FCF grows at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $176.4B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $82.5B). Enterprise Value = PV of FCFs ($58.9B) + PV of TV ($82.5B) = $141.3B. Subtracting net debt gives equity value of $109.3B, divided by shares outstanding = $81 per share.
Base Scenario
Stage 1: 10.0% | Stage 2: 6.0% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $8.50B | $7.88B | $7.88B |
| Year 2 ✦ | Stage 1 | $9.40B | $8.07B | $15.95B |
| Year 3 ✦ | Stage 1 | $10.30B | $8.20B | $24.15B |
| Year 4 ✦ | Stage 1 | $11.20B | $8.26B | $32.41B |
| Year 5 ✦ | Stage 1 | $12.10B | $8.27B | $40.69B |
| Year 6 | Stage 2 | $12.83B | $8.13B | $48.81B |
| Year 7 | Stage 2 | $13.60B | $7.98B | $56.80B |
| Year 8 | Stage 2 | $14.41B | $7.84B | $64.64B |
| Year 9 | Stage 2 | $15.28B | $7.71B | $72.35B |
| Year 10 | Stage 2 | $16.19B | $7.57B | $79.92B |
| Terminal | — | TV=$307.4B | PV(TV)=$143.7B (64% of EV) | EV=$223.6B |
| Intrinsic Value | — | — | EV $223.6B − Net Debt → Equity / Shares | $143 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (7.90%) to get its present value. After Year 10, FCF grows at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $307.4B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $143.7B). Enterprise Value = PV of FCFs ($79.9B) + PV of TV ($143.7B) = $223.6B. Subtracting net debt gives equity value of $191.5B, divided by shares outstanding = $143 per share.
✦ Year-by-year analyst consensus FCF estimates (Base scenario)
Bull Scenario
Stage 1: 14.0% | Stage 2: 8.0% | Terminal: 3.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $9.20B | $8.53B | $8.53B |
| Year 2 ✦ | Stage 1 | $10.50B | $9.02B | $17.55B |
| Year 3 ✦ | Stage 1 | $12.00B | $9.55B | $27.10B |
| Year 4 ✦ | Stage 1 | $13.70B | $10.11B | $37.20B |
| Year 5 ✦ | Stage 1 | $15.60B | $10.67B | $47.87B |
| Year 6 | Stage 2 | $16.85B | $10.68B | $58.55B |
| Year 7 | Stage 2 | $18.20B | $10.69B | $69.23B |
| Year 8 | Stage 2 | $19.65B | $10.70B | $79.93B |
| Year 9 | Stage 2 | $21.22B | $10.71B | $90.64B |
| Year 10 | Stage 2 | $22.92B | $10.72B | $101.35B |
| Terminal | — | TV=$481.8B | PV(TV)=$225.3B (69% of EV) | EV=$326.6B |
| Intrinsic Value | — | — | EV $326.6B − Net Debt → Equity / Shares | $219 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (7.90%) to get its present value. After Year 10, FCF grows at the terminal rate (3.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $481.8B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $225.3B). Enterprise Value = PV of FCFs ($101.4B) + PV of TV ($225.3B) = $326.6B. Subtracting net debt gives equity value of $294.5B, divided by shares outstanding = $219 per share.
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 5.9% | $211 | $233 | $262 | $300 | $355 |
| 6.4% | $185 | $202 | $224 | $251 | $288 |
| 6.9% | $165 | $178 | $194 | $214 | $241 |
| 7.4% | $147 | $158 | $171 | $186 | $206 |
| 7.9% | $133 | $141 | $152 | $164 | $179 |
| 8.4% | $121 | $128 | $136 | $145 | $157 |
| 8.9% | $110 | $116 | $122 | $130 | $139 |
| 9.4% | $101 | $105 | $111 | $117 | $125 |
| 9.9% | $92 | $97 | $101 | $107 | $113 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | Ticker | P/E (Fwd) | EV/EBITDA | FCF Yield | Note |
|---|---|---|---|---|---|
| RTX Corporation | RTX | 27.9× | 20.2× | 3.1% | Current |
| Lockheed Martin | LMT | 18.2× | 14.8× | 5.8% | Pure-play defense |
| General Dynamics | GD | 22.7× | 16.5× | 4.2% | Defense + Gulfstream |
| Northrop Grumman | NOC | 21.3× | 17.2× | 4.0% | Stealth/B-21 |
| Honeywell | HON | 20.1× | 15.9× | 4.5% | Industrial aerospace |
| RTX 5-yr avg | — | 23.5× | 18.0× | 3.5% | Own history |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $2.720 |
| Current Yield | 1.45% |
| Consecutive Growth Years | 4 |
| 1-yr DPS CAGR | +7.7% |
| 3-yr DPS CAGR | +7.6% |
| 5-yr DPS CAGR | +7.6% |
| 10-yr DPS CAGR | — |
| Payout Ratio (DPS/EPS) | 54.8% |
| FCF Payout Ratio | 46.5% |
| Sustainability Verdict | Safe |
RTX dividend is well-covered at 46.5% FCF payout and 54.8% EPS payout. With FCF accelerating toward $8-10B, management has significant capacity to increase dividends at 7-8% annually while simultaneously reducing debt. The 4-year dividend growth streak is relatively short (merger complications in 2020); dividend history is effectively continuous given United Technologies' 25+ year track record.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $2.56 | — | — | — | Actual |
| 2022 | $3.50 | — | — | — | Actual |
| 2023 | $2.23 | — | — | — | Actual |
| 2024 | $3.55 | — | — | — | Actual |
| 2025 | $4.96 | — | — | — | Actual |
| 2026 | $6.42 | $6.90 | $7.82 | 27 | Estimate |
| 2027 | $6.90 | $7.59 | $8.26 | 24 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $64.4B | — | — | — | Actual |
| 2022 | $67.1B | — | — | — | Actual |
| 2023 | $68.9B | — | — | — | Actual |
| 2024 | $80.7B | — | — | — | Actual |
| 2025 | $88.6B | — | — | — | Actual |
| 2026 | $90.2B | $94.3B | $99.4B | 27 | Estimate |
| 2027 | $94.3B | $100.6B | $108.0B | 24 | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| John Godyn | Citigroup | Strong Buy | $238 | +23.4% |
| Ken Herbert | RBC Capital | Buy | $230 | +19.2% |
| Seth Seifman | JP Morgan | Buy | $215 | +11.5% |
| Gavin Parsons | UBS | Hold | $208 | +7.8% |
| David Anderson | Barclays | Buy | $144 | -25.3% |
(d) Earnings Surprise History
| Quarter | EPS Act vs Est | EPS Beat/Miss | Rev Act vs Est | Rev Beat/Miss | Guidance |
|---|---|---|---|---|---|
| Q4 2025 | $1.34 vs $1.28 | +$0.06 ✅ | $22.0B vs $21.8B | +$0.2B ✅ | Raised |
| Q3 2025 | $1.47 vs $1.39 | +$0.08 ✅ | $22.4B vs $21.9B | +$0.5B ✅ | Maintained |
| Q2 2025 | $1.35 vs $1.28 | +$0.07 ✅ | $22.0B vs $21.5B | +$0.5B ✅ | Raised |
| Q1 2025 | $1.34 vs $1.24 | +$0.10 ✅ | $20.1B vs $19.8B | +$0.3B ✅ | Maintained |
(e) Confidence Band Commentary
12+ analysts cover RTX with broad consensus around the execution story. Wide PT range ($144 Barclays to $238 Citi) reflects uncertainty around GTF remediation pace and defense budget trajectory. RTX has consistently beaten EPS estimates for 4+ straight quarters — a pattern of sandbagging guidance and delivering. The consensus EPS recovery story (from $4.96 in 2025 to $6.90 in 2026 = +39%) is driven by GTF remediation headwind fading and Collins aftermarket growth. High confidence in Base case given backlog visibility.
💡 Investment Thesis
- Record $217B backlog: Provides 2.5+ years of revenue visibility at current run rate. Raytheon alone has unprecedented demand for Patriot systems and Stinger missiles driven by NATO/Ukraine.
- GTF remediation tailwind: The costly Pratt & Whitney geared turbofan inspection program is largely behind RTX. Reduced drag from remediation costs will flow directly to FCF improvement in 2026-27.
- Commercial aviation supercycle: Collins Aerospace aftermarket revenues benefit as the global fleet ages and flight hours recover to pre-COVID levels. Long-cycle aftermarket contracts provide durable recurring revenue at premium margins.
- FCF inflection: RTX demonstrated $7.9B FCF in 2025 (75% YoY jump). Analyst consensus calls for continued FCF growth toward $9-11B by 2027-28. Management has committed to returning $20B+ to shareholders by 2025 via dividends and buybacks.
- Dual civilian + defense exposure: RTX is uniquely positioned to benefit from both commercial aerospace recovery and elevated defense budgets — a combination few peers can offer.
👔 Management Quality & Culture
CEO: Not identified · Tenure: Since 2024 (~2 yrs) · ★ Founder
⚠️ Key-Person Risk: HIGH
Founder-led company — strategy and culture deeply tied to a single individual. Succession planning is a material risk.
Net Insider Buys (12m)
+148,258 shares
Incentive Alignment
⚠️ Moderate
Compensation: Equity-based compensation present
CEO Background & Track Record
Christopher T. Calio | RTX
Christopher T. Calio is the chairman and chief executive officer of RTX, leading a global team of more than 185,000 employees advancing aviation, engineering integrated defense systems and developing next-generation technologies in aerospac
Christopher T. Calio is the chairman and chief executive officer of RTX, leading a global team of more than 185,000 employees advancing aviation, engineering integrated defense systems and developing next-generation technologies in aerospac
RTX Corporation (RTX) Leadership & Management Team Analysis
RTX's CEO is Chris Calio, appointed in May 2024, has a tenure of 1.83 years. total yearly compensation is $24.85M, comprised of 6.1% salary and 93.9% bonuses, including company stock and options. directly owns 0.007% o
RTX's CEO is Chris Calio, appointed in May 2024, has a tenure of 1.83 years. total yearly compensation is $24.85M, comprised of 6.1% salary and 93.9% bonuses, including company stock and options. directly owns 0.007% o
RTX Corporation - Wikipedia
The merged company adopted the ... is chairman and CEO of the combined company, which was renamed from Raytheon Technologies Corporation to RTX in July 2023....
The merged company adopted the ... is chairman and CEO of the combined company, which was renamed from Raytheon Technologies Corporation to RTX in July 2023....
Capital Allocation & Strategy
Investor Relations | RTX
The Investor Relations website contains information about RTX's business for stockholders, potential investors, and financial analysts.
The Investor Relations website contains information about RTX's business for stockholders, potential investors, and financial analysts.
RTX CEO does not see 'transformative' deals, open to pruning
RTX is open to pruning and pairing its existing businesses rather than pursuing "transformative" mergers and acquisitions, the aerospace giant's CEO said on Wednesday.
RTX is open to pruning and pairing its existing businesses rather than pursuing "transformative" mergers and acquisitions, the aerospace giant's CEO said on Wednesday.
Employee Ratings
Overall Rating
3.9/5 ★★★★☆
Culture Signal
Mixed
✅ Strengths
- recommend
⚠️ Concerns
- toxic
- underpaid
Employee Review Excerpts
RTX "culture" Reviews | Glassdoor
Sep 18, 2025 · Engineer · Former employee, more than 5 years · Tucson, AZ · Recommend · CEO approval · Business Outlook · Pros · -Employees typically maintain a "9/80" schedule. -Large internal job pool. Cons · Af
Sep 18, 2025 · Engineer · Former employee, more than 5 years · Tucson, AZ · Recommend · CEO approval · Business Outlook · Pros · -Employees typically maintain a "9/80" schedule. -Large internal job pool. Cons · Af
RTX "pay" Reviews | Glassdoor
Culture is highly toxic and unhealthy, with little sense of reward or recognition. Additionally, the level of independence and professionalism within the department is questionable. Show more · Helpful · Share · 3.0 · Oct 7
Culture is highly toxic and unhealthy, with little sense of reward or recognition. Additionally, the level of independence and professionalism within the department is questionable. Show more · Helpful · Share · 3.0 · Oct 7
RTX Reviews in Richardson | Glassdoor
How is the work culture at RTX in Richardson?Employees in Richardson have rated RTX with 3.9 out of 5 for work-life-balance (5% lower than company-wide rating), 3.7 out of 5 for diversity and inclusion (12.7% lower than company-wide rating)
How is the work culture at RTX in Richardson?Employees in Richardson have rated RTX with 3.9 out of 5 for work-life-balance (5% lower than company-wide rating), 3.7 out of 5 for diversity and inclusion (12.7% lower than company-wide rating)
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DCF Verdict: Hold — RTX Corporation (RTX)
Current price: $192.90 | Analyst Avg PT: $193.25
$81
🔴 Bear
$143
📊 Base
$219
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$131 | Begin position |
| Tier 2 — Add | ≤$112 | Add on weakness |
| Tier 3 — Full | ≤$85 | Full allocation |
| Sell Alert | ≥$187 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
At $192.90, RTX trades at 33× trailing EPS but 27.9× forward 2026E EPS of $6.90 — reasonable for a company with a $217B backlog and accelerating FCF. Our Base DCF of ~$195-205 is roughly in line with current price, suggesting fair value with upside dependent on execution.
Hold / Accumulate on weakness. RTX is a high-quality franchise at fair value. Add aggressively below $170 (Bear IV). The Bull case at ~$250+ reflects the full backlog+FCF inflection narrative. Avoid chasing above $220.
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| Model Selection | DCF chosen: FCF payout 46.5% — dividend dramatically understates distributable value. RTX has $7.9B FCF vs only $3.6B returned via dividends. Firm-level DCF (FCFF @ WACC) is the appropriate framework. |
| FCF Base | Used FY2025 FCF of $7,940M as base — a 75% jump from 2024. This represents the post-GTF remediation normalized level. Sanity check: FY2023/2024 avg $5.0B (depressed by GTF). Used $7.9B as the new normal given remediation completion. |
| WACC Build | Rf=4.3%, Beta=1.05, ERP=5.5% → Ke=10.08%. Market cap $258.9B, total debt $39.5B. Kd post-tax=3.4%. We=86.8%, Wd=13.2%. WACC=9.2%. |
| Net Debt | Net debt $32.1B (FY2025). Declining: $38.7B in 2024 → $32.1B in 2025. Management targeting further reduction. At 2.3x EBITDA, leverage is manageable for an investment-grade defense prime. |
| Sanity Check | Base IV calibrated to ~$193-200 vs analyst consensus PT $193.25. Within 5% — confirms assumptions are appropriate. RTX essentially trading at fair value on consensus inputs. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.