Shares of defense contractor RTX Corp. (RTX.US, formerly Raytheon Technologies) are up nearly 2% following the company's earnings release, hitting an all-time high of $128 per share. Investors are hopeful that the company, as a key supplier of missile and hypersonic systems, could benefit from the U.S. Iron Dome defense project announced by Donald Trump. RTX comprises Raytheon, Collins Aerospace, Pratt & Whitney, and Aerojet Rocketdyne, an engine and missile systems provider acquired in 2023. The company’s stock has risen by nearly 40% year-over-year, supported by strong net profit and revenue dynamics relative to the broader U.S. defense sector.
Financial Results
- In Q4, revenues totaled $21.6 billion, reflecting a 9% year-over-year increase, surpassing investor expectations of $20.53 billion. Adjusted earnings per share (EPS) came in at $1.54, marking a 19% increase, well above the market estimate of $1.38. For the full year 2024, adjusted revenues reached $80.8 billion, up 9% year-over-year, while adjusted EPS rose by 13% to $5.73.
- The company’s order backlog now stands at $218 billion, with $125 billion allocated to the commercial sector and $93 billion to defense. For 2025, RTX projects revenues between $83 billion and $84 billion (compared to $80.7 billion in 2024; the market expected $84.5 billion), reflecting an anticipated organic growth of 4–6%. Adjusted EPS is expected to range from $6.00 to $6.15 (analyst estimate: $6.08), with free cash flow projected at $7.0–7.5 billion (compared to $4.5 billion in 2024).
- All three business segments—Collins Aerospace, Pratt & Whitney, and Raytheon—achieved growth in Q4, with significant increases in defense and commercial aftermarket sales. This positive momentum also bodes well for related companies like GE Aerospace, Heico, and Curtiss-Wright.
- Investors welcomed the 77% growth in operating profit for Pratt & Whitney's engines and parts segment, a 17% increase in adjusted operating profit for Collins Aerospace, and 10% organic growth for Raytheon, indicating consistently strong demand in the defense sector.
RTX Corp. (Daily Interval - D1)
On the daily interval (D1), RTX shares quickly recovered from a shallow correction, and pre-market trading suggests the stock could reach new all-time highs today. Notably, the correction in RTX shares was milder than those experienced by competitors such as Lockheed Martin, General Dynamics, and Northrop Grumman. Investors may view RTX as a potentially larger beneficiary of the U.S. Iron Dome defense program. The company has already collaborated on building the Israeli prototype of the Iron Dome missile defense system. However, the company sales forecasts for 2025 are quite conservative.
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Source: xStation5
Financial Metrics
The company boasts relatively low P/E and forward P/E ratios, coupled with a rising ROIC and decreasing WACC. However, it also has relatively high debt levels, with a current ratio close to 1. However, the revenue trend remains upward, and the Iron Dome project could act as a catalyst for its backlog in the coming years. Unlike General Dynamics, Lockheed Martin, or Northrop Grumman, RTX specializes more in hypersonic and missile technologies.
Source: XTB Research, Bloomberg Finance L.P.
Source: XTB Research, Bloomberg Finance L.P.
