Update shared on12 Sep 2025
Fair value Increased 0.45%The slight increase in RTX’s price target reflects improved Q2 results, a more favorable tariff outlook, and strong long-term defense tailwinds, with the consensus analyst fair value rising modestly from $163.84 to $164.58.
Analyst Commentary
- Bullish analysts raised price targets after RTX posted better-than-expected Q2 2025 earnings results, driven by broad-based strength across all major operating segments.
- Improved 2025 tariff outlook led to upward target revisions, with risks from tariffs now accounted for in updated guidance.
- Despite slight downward adjustments to near-term EPS forecasts due to tariff and business mix headwinds, long-term earnings growth is anticipated to remain strong, supported by favorable defense and aftermarket trends.
- Recent legislative changes, including an additional $150B in mandatory U.S. Defense budget spending, NATO's increased defense spending pledges, and further U.S. military support to Ukraine, are expected to provide significant tailwinds for RTX.
- Continued sector-wide momentum in aerospace and defense, as previewed by industry analysts, underpins sustained optimism for RTX’s fundamentals and valuation.
What's in the News
- President Trump plans to reinterpret arms control treaties to ease limits on advanced U.S. military drone exports, potentially benefitting RTX as a listed military drone manufacturer (Reuters, 2025-09-05).
- Saudi Arabia's pending request for over 100 MQ-9 "Reaper" drones and expanded global drone sales could boost demand for U.S. defense suppliers including RTX (Reuters, 2025-09-05).
- China is restricting exports of critical minerals essential for defense manufacturing, disrupting supply chains and production for RTX and peers as companies scramble for new sources (WSJ, 2025-08-04).
- China supplies about 90% of the world's rare earths, increasing Western defense contractors' vulnerability to Chinese trade actions (WSJ, 2025-08-04).
- The U.S. defense budget for next year is proposed at $892.6B, flat year-over-year, with more funds earmarked for high-tech missiles and drones (key RTX segments), but cuts to Navy jobs, ships, and fighter jets (Reuters, 2025-06-26).
Valuation Changes
Summary of Valuation Changes for RTX
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $163.84 to $164.58.
- The Consensus Revenue Growth forecasts for RTX remained effectively unchanged, moving only marginally from 5.3% per annum to 5.4% per annum.
- The Future P/E for RTX remained effectively unchanged, moving only marginally from 31.70x to 31.84x.
Disclaimer
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