D-Wave Quantum falls nearly 3% as earnings miss overshadows revenue beat
Investing.com - Bernstein SocGen Group has raised its price target on RTX Corp. (NYSE:RTX) to $154.00 from $136.00 while maintaining a Market Perform rating. According to InvestingPro data, RTX is trading near its 52-week high of $149.26, with the stock currently valued at $146.07.
The firm cited RTX’s defense segment as a winner from the President’s budget proposal, NATO Summit, and Golden Dome approach. As a prominent player in the Aerospace & Defense industry, RTX has demonstrated strong performance with revenue growth of 15.11% and total revenue reaching $81.74 billion. Demand growth is coming from missile and missile defense businesses, which achieved a Q1 backlog to last-twelve-months sales ratio of 2.31X, despite slower performance in space and airborne sensors.
Pratt & Whitney continues to face challenges with its GTF engines, with over 610 grounded PW1100 airplanes. Management expects these numbers to decrease in the second half of the year as shop throughput improves and more spare engines become available. Bernstein lowered its 2025 free cash flow estimate to $6.9 billion due to impact from the Pratt strike.
The Collins Aerospace segment shows promise for steady improvement, with Bernstein raising its margin outlook based on improving Boeing (NYSE:BA) and Airbus production ramps providing operating leverage. Solid aftermarket growth is expected to further support margins in this division.
Bernstein increased its EV/EBITDA multiple for RTX to 16.6X from 15.3X, primarily based on a higher defense relative multiple of 110%, with the overall multiple representing a blend of defense and commercial valuations.
In other recent news, Raytheon (NYSE:RTN) has secured several significant contracts with the U.S. Department of Defense. The company has been awarded a $279.2 million contract to provide management support for the Land-Based Phalanx Weapon System, with the Army Contracting Command at Redstone Arsenal overseeing the project. Additionally, Raytheon received a $77.2 million contract for the production and sustainment of Miniaturized Airborne Global Positioning System Receivers, managed by the Air Force Life Cycle Management Center. The company also obtained a $74 million contract modification for Rolling Airframe Missile systems, funded primarily through Navy procurement budgets.
Further developments include a $52.3 million contract modification for GPS navigation services, expanding the ceiling on an existing agreement for software support services. Raytheon has also been awarded a $49.8 million contract modification to produce Standard Missile-6 systems for the U.S. Navy, with the work distributed across various locations. These contracts highlight Raytheon’s ongoing role in providing advanced defense systems and technology to the U.S. military.
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