RTX (RTX) shares have edged down in the past week, with short-term market factors influencing sentiment. Investors seem to be watching broader economic signals and the company’s recent trading activity for new signs of direction.
RTX’s share price has experienced some volatility lately, but zooming out reveals strong momentum. The company has posted a 35.94% share price return year-to-date and a total shareholder return of nearly 188% over five years. This combination of short-term fluctuations and robust long-term gains suggests the market continues to recognize RTX’s growth potential while reassessing risks as new data emerges.
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With the stock up nearly 36% year-to-date but still trading at a 10% discount to analyst targets, investors now face a key question: Is there still an attractive entry point, or has the market already factored in future growth?
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Most Popular Narrative: 5.3% Undervalued
RTX’s last closing price sits below the narrative’s fair value estimate, hinting at a window of upside potential according to the latest widely followed perspective.
Robust and growing backlog, highlighted by a 1.86 quarter book-to-bill ratio, $236 billion backlog (up 15% year-over-year), and major new international contracts (e.g., EU, MENA, Asia-Pacific) indicate RTX is well positioned to benefit from sustained increases in global defense spending and heightened geopolitical tensions. This sets up strong visibility for future revenue growth.
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However, continued tariff pressures or setbacks with jet engine reliability could challenge RTX’s margin and earnings growth narrative in the coming quarters.
Another View: Market Multiples Paint a Different Picture
Looking through the lens of market multiples, RTX currently trades at a price-to-earnings ratio of 34.3x, which is above its peer average of 28.3x and just above its own fair ratio of 33.6x. While it is still cheaper than the broader Aerospace & Defense industry average of 39.2x, this gap suggests investors are paying a bit of a premium for RTX compared to similar companies. Is the premium justified, or is the risk of repricing on the horizon?
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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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An aerospace and defense company, provides systems and services for the commercial, military, and government customers in the United States and internationally.
