Jefferies maintains Hold rating on RTX stock amid MTU’s raised guidance

Published 21/07/2025, 18:40
Jefferies maintains Hold rating on RTX stock amid MTU’s raised guidance

Investing.com - Jefferies has reiterated its Hold rating and $160.00 price target on RTX Corp. (NYSE:RTX), which is currently trading near its 52-week high of $152.85, following updates from MTU at the Paris Air Show. According to InvestingPro data, analyst targets for RTX range from $115 to $182, with the stock showing strong momentum, gaining over 50% in the past year.

MTU raised its 2025 revenue guidance to mid-teens growth from previous low-teens growth, with approximately 100 basis points higher EBIT margins.

The improved outlook is based on higher GTF spares, heavier V2500 workscopes, and better GEnx aftermarket volumes, according to Jefferies.

MTU’s aftermarket guidance implies mid to high-teens growth compared to Jefferies’ projection of 12% growth for Pratt & Whitney’s aftermarket business, with 17% aftermarket growth in 2025 potentially adding 10 cents of upside to RTX’s earnings per share.

Looking further ahead, MTU targets 14.5-15.5% margins by 2030, down from 15.4% currently, while RTX maintains a long-term mid-teens margin target dependent on OEM pricing and restructured GTF long-term agreement contracts.

In other recent news, Raytheon (NYSE:RTN), a business of RTX, has secured a $74 million contract to produce RAM Guided Missile Launching Systems for the U.S. Navy. This contract, the largest single order of U.S. RAM launchers in over two decades, includes new launcher systems and refurbishment of existing ones. Additionally, Raytheon has been awarded a $77.2 million contract for the production and sustainment of Miniaturized Airborne Global Positioning System Receivers, with work expected to continue until 2031. The company also received a $49.8 million contract modification for Standard Missile-6 systems, supporting full-rate production requirements.

Meanwhile, RTX’s stock price target was raised to $154 from $136 by Bernstein SocGen Group, maintaining a Market Perform rating. The firm’s analysis highlighted RTX’s defense segment as benefiting from recent governmental initiatives and strong demand growth in missile defense. However, challenges persist with Pratt & Whitney’s GTF engines, impacting free cash flow estimates. Despite these challenges, Collins Aerospace is expected to see margin improvements due to increased production from Boeing (NYSE:BA) and Airbus. These developments reflect RTX’s ongoing strategic engagements and performance adjustments.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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