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The Zacks Consensus Estimate for revenues is pegged at $20.66 billion, implying 4.8% growth from the year-ago quarter's reported figure. The consensus mark for earnings is pegged at $1.45 per share, suggesting a 2.8% rise from the prior-year quarter’s level. The bottom-line estimate has, however, slipped 0.7% in the past 60 days. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Image Source: Zacks Investment Research
RTX, a prominent U.S. defense contractor, has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 9.91%.
Image Source: Zacks Investment Research
Earnings Whisper for RTX Stock
Our proven model predicts an earnings beat for RTX this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is also the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Steady growth in domestic and international air traffic has driven higher flight hours, consistently boosting aftermarket demand for commercial jets in recent quarters. This trend likely continued in the second quarter of 2025, with strong volume growth in large commercial engines supporting RTX’s aftermarket sales.
Simultaneously, rising demand for passenger jets, driven by improved air travel, likely boosted engine deliveries from the Pratt & Whitney unit. Notably, high sales of RTX-made engines for Airbus A220 and Boeing 787 are expected to have supported the company’s commercial original equipment manufacturer (OEM) revenues.
Overall, robust sales momentum across both commercial OEM and aftermarket segments likely lifted top-line projections for the Pratt & Whitney and Collins Aerospace units.
The Zacks Consensus Estimate for Pratt & Whitney’s second-quarter adjusted sales is pegged at $7,284 million, indicating an improvement of 7.1% from the year-ago quarter’s reported figure. The consensus mark for Collins Aerospace’s adjusted sales is pinned at $7,249.3 million, indicating a 3.6% increase from the prior-year quarter’s level.
Solid Outlook for Military Sales
Rising geopolitical tensions continue to drive growth for defense contractors like RTX. In the second quarter of 2025, RTX’s military sales are expected to have benefited from increased engine deliveries for the tanker program and strong demand for the F135 Engine Core Upgrade on F-35 fighter jets.
While Pratt & Whitney and Collins Aerospace contribute to select defense programs, RTX’s Raytheon segment remains the core of its defense business in terms of missile deliveries. Notably, higher sales of land and air defense systems, particularly the Patriot missile, are expected to have boosted Raytheon’s revenues. Overall, robust demand across key defense programs must have supported top-line growth for RTX’s military business.
The Zacks Consensus Estimate for Raytheon’s second-quarter sales is pegged at $6,773.3 million, indicating an improvement of 4% from the year-ago quarter’s reported figure.
Other Factors at Play
Strong sales performance from the majority of RTX’s businesses, as mentioned above, must have boosted the company’s overall second-quarter revenues. Factors such as solid sales expectations, profit from the higher commercial aftermarket at Pratt & Whitney and Collins Aerospace, increased defense volume, and improved net productivity are expected to have bolstered RTX’s earnings.
However, the absence of profit from Raytheon’s cybersecurity business, following its divestiture, along with the adverse impact of the import tariff (imposed recently by the U.S. government) might have affected the company’s bottom-line performance to some extent.
Price Performance & Valuation
RTX’s shares have exhibited an upward trend, gaining a notable percentage over the past six months. Specifically, the stock has surged 24.1%, outperforming the Zacks aerospace-defense industry as well as the Zacks Aerospace sector’s growth of 21.3%. It has also outpaced the S&P 500’s rise of 3.5% over the past six months.
Image Source: Zacks Investment Research
Other notable stocks from the same industry have, however, performed well over the said timeframe. Shares of The Boeing Company (BA - Free Report) and Textron (TXT - Free Report) have gained 34.2% and 6.3%, respectively.
From a valuation perspective, RTX is trading at a premium when compared to its industry. Currently, RTX is trading at 2.31X forward 12-month price/sales, higher than the peer group’s forward 12-month price/sales of 1.88X. Also, its five-year median is 1.88X. So, the company’s valuation looks stretched compared with the mid-point of its own five-year range.
RTX’s Price-to-Sales (Forward 12 Months)
Image Source: Zacks Investment Research
However, its industry peers are currently trading at a discount. While the forward 12-month price/sales for Boeing is 1.90X, the same for Textron is 1.02X.
Investment Thesis
As we witness heightened geopolitical tensions across the globe due to a significant spike in cross-border disputes, such as Iran-Israel, and civil unrest in various parts of the world lately, the growing demand for defense products continues to play a vital role in boosting sales growth for prominent defense contractors like RTX, TXT and BA.
Expanding commercial air traffic worldwide also remains a major growth catalyst for RTX, with more than 13,000 of its large commercial engines installed globally. We may expect the company’s second-quarter results to duly reflect these growth trends in terms of notable revenue and earnings growth.
However, RTX’s return on equity (ROE) was much lower than that of its peer group. This indicates that the company is not effectively using its shareholders' equity to generate profits compared to its Peer Group.
RTX’s ROE
Image Source: Zacks Investment Research
Should You Buy RTX Stock Before Q2 Earnings Release?
While RTX continues to benefit from strong commercial and military sales momentum, investors should adopt a cautious stance with the approach of second-quarter results. The company's unfavorable Zacks Rank, downward earnings revision and neutral Earnings ESP don’t strongly support the case for an earnings beat this time around. Additionally, RTX’s premium valuation and lower ROE relative to peers raise concerns about its near-term upside potential. Given these, investors interested in RTX may consider staying on the sidelines until next Tuesday.
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Should You Buy, Sell or Hold RTX Stock Ahead of Q2 Earnings Release?
Key Takeaways
RTX Corp. (RTX - Free Report) is slated to release second-quarter 2025 results on July 22, before the opening bell.
The Zacks Consensus Estimate for revenues is pegged at $20.66 billion, implying 4.8% growth from the year-ago quarter's reported figure. The consensus mark for earnings is pegged at $1.45 per share, suggesting a 2.8% rise from the prior-year quarter’s level. The bottom-line estimate has, however, slipped 0.7% in the past 60 days. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Image Source: Zacks Investment Research
RTX, a prominent U.S. defense contractor, has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 9.91%.
Image Source: Zacks Investment Research
Earnings Whisper for RTX Stock
Our proven model predicts an earnings beat for RTX this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is also the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
RTX has a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00% at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Key Factors to Consider for RTX’s Q2 Results
Growing Commercial Sales: A Key Growth Catalyst
Steady growth in domestic and international air traffic has driven higher flight hours, consistently boosting aftermarket demand for commercial jets in recent quarters. This trend likely continued in the second quarter of 2025, with strong volume growth in large commercial engines supporting RTX’s aftermarket sales.
Simultaneously, rising demand for passenger jets, driven by improved air travel, likely boosted engine deliveries from the Pratt & Whitney unit. Notably, high sales of RTX-made engines for Airbus A220 and Boeing 787 are expected to have supported the company’s commercial original equipment manufacturer (OEM) revenues.
Overall, robust sales momentum across both commercial OEM and aftermarket segments likely lifted top-line projections for the Pratt & Whitney and Collins Aerospace units.
The Zacks Consensus Estimate for Pratt & Whitney’s second-quarter adjusted sales is pegged at $7,284 million, indicating an improvement of 7.1% from the year-ago quarter’s reported figure. The consensus mark for Collins Aerospace’s adjusted sales is pinned at $7,249.3 million, indicating a 3.6% increase from the prior-year quarter’s level.
Solid Outlook for Military Sales
Rising geopolitical tensions continue to drive growth for defense contractors like RTX. In the second quarter of 2025, RTX’s military sales are expected to have benefited from increased engine deliveries for the tanker program and strong demand for the F135 Engine Core Upgrade on F-35 fighter jets.
While Pratt & Whitney and Collins Aerospace contribute to select defense programs, RTX’s Raytheon segment remains the core of its defense business in terms of missile deliveries. Notably, higher sales of land and air defense systems, particularly the Patriot missile, are expected to have boosted Raytheon’s revenues. Overall, robust demand across key defense programs must have supported top-line growth for RTX’s military business.
The Zacks Consensus Estimate for Raytheon’s second-quarter sales is pegged at $6,773.3 million, indicating an improvement of 4% from the year-ago quarter’s reported figure.
Other Factors at Play
Strong sales performance from the majority of RTX’s businesses, as mentioned above, must have boosted the company’s overall second-quarter revenues.
Factors such as solid sales expectations, profit from the higher commercial aftermarket at Pratt & Whitney and Collins Aerospace, increased defense volume, and improved net productivity are expected to have bolstered RTX’s earnings.
However, the absence of profit from Raytheon’s cybersecurity business, following its divestiture, along with the adverse impact of the import tariff (imposed recently by the U.S. government) might have affected the company’s bottom-line performance to some extent.
Price Performance & Valuation
RTX’s shares have exhibited an upward trend, gaining a notable percentage over the past six months. Specifically, the stock has surged 24.1%, outperforming the Zacks aerospace-defense industry as well as the Zacks Aerospace sector’s growth of 21.3%. It has also outpaced the S&P 500’s rise of 3.5% over the past six months.
Image Source: Zacks Investment Research
Other notable stocks from the same industry have, however, performed well over the said timeframe. Shares of The Boeing Company (BA - Free Report) and Textron (TXT - Free Report) have gained 34.2% and 6.3%, respectively.
From a valuation perspective, RTX is trading at a premium when compared to its industry. Currently, RTX is trading at 2.31X forward 12-month price/sales, higher than the peer group’s forward 12-month price/sales of 1.88X. Also, its five-year median is 1.88X. So, the company’s valuation looks stretched compared with the mid-point of its own five-year range.
RTX’s Price-to-Sales (Forward 12 Months)
Image Source: Zacks Investment Research
However, its industry peers are currently trading at a discount. While the forward 12-month price/sales for Boeing is 1.90X, the same for Textron is 1.02X.
Investment Thesis
As we witness heightened geopolitical tensions across the globe due to a significant spike in cross-border disputes, such as Iran-Israel, and civil unrest in various parts of the world lately, the growing demand for defense products continues to play a vital role in boosting sales growth for prominent defense contractors like RTX, TXT and BA.
Expanding commercial air traffic worldwide also remains a major growth catalyst for RTX, with more than 13,000 of its large commercial engines installed globally. We may expect the company’s second-quarter results to duly reflect these growth trends in terms of notable revenue and earnings growth.
However, RTX’s return on equity (ROE) was much lower than that of its peer group. This indicates that the company is not effectively using its shareholders' equity to generate profits compared to its Peer Group.
RTX’s ROE
Image Source: Zacks Investment Research
Should You Buy RTX Stock Before Q2 Earnings Release?
While RTX continues to benefit from strong commercial and military sales momentum, investors should adopt a cautious stance with the approach of second-quarter results. The company's unfavorable Zacks Rank, downward earnings revision and neutral Earnings ESP don’t strongly support the case for an earnings beat this time around. Additionally, RTX’s premium valuation and lower ROE relative to peers raise concerns about its near-term upside potential. Given these, investors interested in RTX may consider staying on the sidelines until next Tuesday.