Vertical Research lifts RTX Corp price target to $159, keeps Buy rating

On Tuesday, Vertical Research Partners showed confidence in RTX Corp. (NYSE: RTX) by increasing the company’s price target from $155.00 to $159.00, while reiterating a Buy rating. The adjustment comes after RTX reported its fourth-quarter results, which, according to Vertical Research Partners, signified a year of significant progress in overcoming challenges from the 2023 GTF issues. The aerospace giant, now valued at $169.7 billion, has demonstrated strong momentum with a 41.6% return over the past year, according to InvestingPro data.

The analyst from Vertical Research Partners noted that RTX’s fourth-quarter performance may not have been as outstanding as GE Aerospace’s results announced last week, but it still highlighted a year of positive developments for the company. With impressive revenue growth of 17.8% and a steady dividend yield of 2.02%, RTX has maintained its position as a prominent player in the Aerospace & Defense industry. The analyst specifically pointed out the advancements in various segments of RTX’s business, including improvements that have made Raytheon (NYSE:RTN) resemble its former, more robust self.

Looking ahead, the analyst remarked on the company’s 2025 guidance, describing it as "suitably grounded" with the possibility for better outcomes if the aftermarket and defense sectors outperform initial yearly projections. The forecast was appreciated for its realistic approach and acknowledgment of potential growth areas. InvestingPro analysis reveals 12 additional key insights about RTX’s future prospects, available exclusively to subscribers, along with comprehensive financial health metrics that currently indicate a GOOD overall rating.

The valuation of RTX stock was also a subject of the analyst’s commentary. They pointed out that at 18 times the projected 2026 earnings, RTX stock represents one of the few remaining relative value opportunities within their coverage area. This valuation suggests that the stock may be attractively priced compared to its future earnings potential.

In conclusion, Vertical Research Partners reaffirmed their Buy rating on RTX Corp., underlining their positive outlook on the company’s future performance and stock value. The new price target of $159.00 reflects the firm’s belief in RTX’s potential for continued progress and value creation.

In other recent news, Boeing Co (NYSE:BA).’s Jeppesen navigation unit has drawn considerable interest from major aviation suppliers and private equity firms, such as RTX Corp. and Honeywell International Inc (NASDAQ:HON)., for its potential sale. The unit, which provides interactive flight plans, could fetch a price between $6 billion and $8 billion. This sale is part of Boeing’s strategy to streamline its operations and focus on its core businesses. Boeing Co. also anticipates losses in its Q4 results due to strikes and program charges. Despite these setbacks, the company projects the first delivery of the 777-9 aircraft in 2026 and has resumed production of its 737, 767, and 777/777X aircraft models. Barclays (LON:BARC) upgraded Boeing stock from Equalweight to Overweight, expecting sustained positive momentum in production and deliveries throughout 2025.

RTX Corp, one of the interested parties in Boeing’s Jeppesen unit, has seen a stable stock outlook as Bernstein focuses on 2025 guidance and growth dynamics. The company reported a robust third-quarter performance, with an adjusted earnings per share of $1.45 and an 8% increase in organic revenue. Citi analyst Jason Gursky upgraded RTX Corp’s stock rating from Neutral to Buy, reflecting confidence in the company’s revenue and cash flow growth. Gursky also projected that RTX Corp could generate about $10 billion in free cash flow by 2027.

RTX Corp has also secured multiple defense contracts, including a $529 million contract to supply the Netherlands with a Patriot air and missile defense system fire unit. However, Wizz Air, a client of Pratt & Whitney, a division of RTX Corp, has expressed concerns over ongoing issues with Pratt & Whitney engines, which are expected to persist for four to five years. These are the recent developments at Boeing Co. and RTX Corp.

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