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Thursday, Bernstein analysts have increased the price target on RTX Corp. (NYSE:RTX) to $136.00, up from the previous $131.00, while maintaining a Market Perform rating on the stock. The adjustment follows RTX’s fourth-quarter earnings, which surpassed the consensus estimates, and reflects a more optimistic view of the company’s long-term margin trajectory. With a market capitalization of $166.55 billion, RTX has demonstrated strong momentum, achieving a 41% return over the past year. InvestingPro analysis indicates the stock is currently fairly valued, with analyst targets ranging from $113 to $159.
RTX Corp. recently reported adjusted earnings per share (EPS) of $1.54, which exceeded the consensus forecast of $1.39. The company’s guidance for full-year EPS ranging from $6.00 to $6.15, as well as its free cash flow (FCF) guidance of $7.0 billion to $7.5 billion, both aligned with market expectations. Bernstein’s revised FCF estimate for RTX now stands at $7.3 billion, placing it squarely in the middle of the company’s provided guidance range. According to InvestingPro data, RTX maintains impressive revenue growth of 17.15% and trades at an attractive PEG ratio of 0.59, suggesting good value relative to its growth rate. Subscribers can access 8 additional ProTips and comprehensive financial metrics.
The analysts have also revised their 2025 EPS estimate for RTX to $6.07. This revision comes on the heels of developments at Pratt & Whitney, a division of RTX, where issues related to the grounding of GTF engines are seeing a decrease. This is due to expanding maintenance, repair, and overhaul (MRO) capabilities, as well as a growing inventory of spare parts.
The aftermarket for the V2500 engine is expected to remain robust, with stable shop visits projected through 2026. This stability is anticipated to bring revenue benefits from both pricing and the scope of work required. Additionally, the GTF aftermarket is set to provide an increasing contribution to the company’s financial performance over the next four years. However, Bernstein analysts note that margin headwinds are likely to arise from GTF original equipment (OE) sales, as the delivery of high-value spare engines diminishes in the sales mix. InvestingPro’s Financial Health Score rates RTX as ’FAIR’, with particularly strong momentum metrics. Get access to the full RTX Research Report, part of InvestingPro’s coverage of 1,400+ US stocks, for detailed analysis and actionable insights.
Bernstein’s long-term margin outlook for RTX remains roughly unchanged, with the performance of the Advantage program at Pratt & Whitney being highlighted as a key factor in the division’s future outlook.
In other recent news, RTX Corp has been the subject of several analyst updates following strong financial performance. RBC Capital Markets raised its price target for the company to $150 and maintained an Outperform rating, following reported year-over-year adjusted revenue growth of 9%. The fourth quarter of 2024 saw robust results for RTX Corp’s Pratt & Whitney division, with an organic growth of 18%. Additionally, Collins Aerospace, a unit of RTX Corp, secured a $904 million contract to further develop the U.S. Navy’s Cooperative Engagement Capability.
Analysts from UBS and Vertical Research Partners also raised their price targets for RTX Corp to $142 and $159 respectively, while Citi upgraded the company’s stock rating from Neutral to Buy. These updates come amidst RTX Corp’s interest in acquiring Boeing Co (NYSE:BA).’s Jeppesen navigation unit, and a $529 million contract to supply the Netherlands with a Patriot air and missile defense system fire unit. However, concerns have been raised by Wizz Air, a client of Pratt & Whitney, over ongoing issues with Pratt & Whitney engines expected to persist for several years. These are the recent developments concerning RTX Corp.
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