Results: RTX Corporation Exceeded Expectations And The Consensus Has Updated Its Estimates

A week ago, RTX Corporation (NYSE:RTX) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 4.9% to hit US$19b. RTX also reported a statutory profit of US$1.28, which was an impressive 38% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for RTX

Taking into account the latest results, the most recent consensus for RTX from 22 analysts is for revenues of US$78.9b in 2024. If met, it would imply a decent 11% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 64% to US$4.29. In the lead-up to this report, the analysts had been modelling revenues of US$78.7b and earnings per share (EPS) of US$4.24 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$104. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values RTX at US$120 per share, while the most bearish prices it at US$85.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the RTX's past performance and to peers in the same industry. It's clear from the latest estimates that RTX's rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 7.0% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 2.5% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that RTX is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on RTX. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple RTX analysts - going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 4 warning signs for RTX that we have uncovered.

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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.