How Raytheon's New U.S. Rocket Motor Partnership Could Impact RTX (RTX) Supply Chain

• Raytheon recently announced it signed a Memorandum of Understanding with Avio to help establish a solid rocket motor facility in the United States, which will serve Raytheon and other customers as a vertically integrated merchant supplier with preferred access for Raytheon.
• This collaboration is expected to bolster domestic manufacturing capabilities for advanced defense components and strengthen both companies' supply chain resilience to meet growing global defense demand.
• We'll explore how this new U.S.-based rocket motor facility partnership could impact RTX's long-term supply chain and competitive position.

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RTX Investment Narrative Recap

RTX shareholders typically believe in continued global defense and aerospace spending, supported by technological strength and resilient supply chains. The new rocket motor facility initiative with Avio may strengthen RTX’s long-term competitive position and vertical integration, but it is not expected to materially impact the most important near-term catalyst: executing on backlog and delivering high-margin international contracts. The biggest risk remains exposure to defense budget swings or program delays that could affect hardware and missile systems revenue streams.

Of RTX’s recent announcements, the repeated dividend affirmation stands out as most relevant, signaling stable cash flow and management’s focus on rewarding shareholders. This is particularly important for investors monitoring short-term catalysts, as the company’s ability to meet guidance and maintain strong capital returns is central to sentiment given ongoing capital commitments and supply chain investments.

However, with persistent government defense budget uncertainty, investors should also be aware that shifts in spending priorities could...

Read the full narrative on RTX (it's free!)

RTX's narrative projects $97.7 billion revenue and $8.9 billion earnings by 2028. This requires 5.3% yearly revenue growth and an increase of $2.8 billion in earnings from $6.1 billion today.

Uncover how RTX's forecasts yield a $192.06 fair value, a 7% upside to its current price.

Exploring Other Perspectives

Eight individual fair value estimates from the Simply Wall St Community put RTX’s worth between US$131.81 and US$192.06 per share. While the bullish outlooks align with RTX’s solid international defense backlog, views on risk and future returns differ widely, explore the full range of perspectives to see how others weigh evolving catalysts and challenges.

Explore 8 other fair value estimates on RTX - why the stock might be worth as much as 7% more than the current price!

Build Your Own RTX Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your RTX research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free RTX research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate RTX's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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