We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
How Should You Play RTX Stock Following Its DARPA Contract Win?
Read MoreHide Full Article
Key Takeaways
RTX wins DARPA deal to develop STALAGMITE for automating complex cybersecurity threat mitigation.
Shares gained 23% in six months, beating aerospace peers and the broader markets performance.
Defense backlog hits $92B as Pentagon orders and global air travel boost RTX's revenue prospects.
RTX Corp.’s ((RTX - Free Report) ) BBN Technologies company has recently secured a DARPA contract for the Intelligent Generation of Tools for Security program, aimed at strengthening cybersecurity by automating the creation, modeling and mitigation of complex exploit chains. Leveraging its testbed architecture expertise, BBN will develop STALAGMITE, a platform enabling high-fidelity simulations, proactive threat responses, and efficient security research, initially focused on Android but with broader applications.
By reducing reliance on costly, time-intensive manual methods, the project will enhance defenses across sectors, from personal to military. This should further expand RTX's footprint in the cybersecurity market, thereby attracting investors interested in the cybersecurity industry to consider adding the stock to their portfolio.
However, a prudent investor knows that a strategic decision like investing in a stock should not be based on a single event alone. Instead, it should be based on a detailed and thorough analysis of the company’s strengths, growth prospects, recent performance in the markets, and potential risks (if any) associated with investing in it. So, here’s a detailed analysis of RTX stock to help make a prudent investment decision.
RTX 6-Month Performance
RTX’s shares have gained 23% in the past six months, outperforming the Zacks Aerospace-Defense industry’s surge of 20.3% and the broader Zacks Aerospace sector’s rise of 20.8%. The stock has also outpaced the S&P 500’s return of 4.4%.
Image Source: Zacks Investment Research
Notable gains at the bourses have also been reflected in the share prices of other prominent defense contractors, such as The Boeing Company ((BA - Free Report) ) and General Dynamics ((GD - Free Report) ), over the past six months. Shares of Boeing surged a solid 21.9%, while those of General Dynamics rose 28%.
RTX Stock’s Growth Catalysts
With its extensive portfolio of combat-proven defense products, RTX continues to secure substantial orders from the Pentagon and international allies. In line with its strong track record, the company secured several significant defense contracts in the second quarter, resulting in robust bookings of $12 billion.
These bookings culminated in a solid defense backlog of $92 billion for RTX as of June 30, 2025. Such impressive backlog results make us optimistic about the revenue growth prospects of the company's defense business. This, in turn, should boost its bottom line over the long term.
In line with this, the consensus estimate for RTX’s long-term (three-to-five-year) earnings growth rate is pegged at a solid 9.1%.
Impressively, a steady flow of orders from the Pentagon and other US allies, backed by intensifying geopolitical tensions around the world in recent times, has also been driving top and bottom-line performances of other prime defense contractors. Notably, the consensus estimate for Boeing and General Dynamics’ long-term earnings growth rate is pegged at a solid 17.9% and 10.7%, respectively.
Beyond defense, RTX also enjoys a solid presence in the commercial aerospace market through its Pratt & Whitney and Collins Aerospace segments, which serve both the commercial OEM and aftermarket industries. Notably, the steadily rising global air travel has been playing the role of a key growth catalyst for RTX’s commercial business. Evidently, during the second quarter of 2025, it’s Collins Aerospace Unit registered an 8.9% year-over-year improvement in revenues while sales from Pratt and Whitney grew 12.2%.
Looking ahead, robust growth in commercial aerospace and growing demand for defense products worldwide should substantially boost RTX’s operating results in the near future. Let’s take a sneak peek at RTX’s near-term earnings and sales estimates to check what they suggest.
RTX’s Estimates
The Zacks Consensus Estimate for second-quarter 2025 revenues suggests a solid improvement of 6.5% from the prior-year quarter’s level, while that for earnings implies a decline of 2.8%. The annual estimated figures for 2025 and 2026 indicate improvement on both counts.
The near-term earnings estimates have moved southward over the past 60 days, suggesting declining analysts’ confidence in this stock’s bottom-line growth prospects.
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
Risks to Take Note of Before Choosing RTX
Like many other commercial aerospace industry players, RTX faces the ongoing challenges of global supply-chain disruption, including parts shortages, inflation and labor constraints. These, in turn, have hurt its performance. Looking ahead, International Air Transport Association’s (“IATA”) outlook highlights that aircraft deliveries are 30% below peak levels, creating a record 17,000-aircraft backlog.
With airlines short by 5,400 aircraft and production at roughly 2,000 annually, clearing this backlog could take 3-5 years, as per IATA. This scenario threatens to cause production delay for RTX’s jet engine and thereby the revenue realization from it, exacerbating supply-side pressures in an already constrained aerospace production environment.
Additionally, recent U.S. executive orders issued in February 2025 imposed new tariffs on imports, prompting retaliatory measures from China, the EU and Canada. The resultant turmoil, likely to affect global trade, may, in turn, affect defense stocks such as RTX, BA and GD, which have significant exposure in nations outside the United States.
RTX Stock Trading at a Premium
In terms of valuation, RTX’s forward 12-month price-to-earnings (P/E) is 24.29, a premium to its peer group’s average of 23.81X. This suggests that investors will be paying a higher price than the company's expected earnings growth compared to that of its peers.
Image Source: Zacks Investment Research
How to Play RTX Stock?
To conclude, considering RTX’s premium valuation, declining earnings estimate and persistent supply-chain impact, investors interested in this stock should adopt a wait-and-watch approach for the time being. However, those who already have this Zacks Rank #3 (Hold) stock in their portfolio may continue to do so, taking into account its outperformance at the bourses, solid revenue growth prospects and favorable market dynamics. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
How Should You Play RTX Stock Following Its DARPA Contract Win?
Key Takeaways
RTX Corp.’s ((RTX - Free Report) ) BBN Technologies company has recently secured a DARPA contract for the Intelligent Generation of Tools for Security program, aimed at strengthening cybersecurity by automating the creation, modeling and mitigation of complex exploit chains. Leveraging its testbed architecture expertise, BBN will develop STALAGMITE, a platform enabling high-fidelity simulations, proactive threat responses, and efficient security research, initially focused on Android but with broader applications.
By reducing reliance on costly, time-intensive manual methods, the project will enhance defenses across sectors, from personal to military. This should further expand RTX's footprint in the cybersecurity market, thereby attracting investors interested in the cybersecurity industry to consider adding the stock to their portfolio.
However, a prudent investor knows that a strategic decision like investing in a stock should not be based on a single event alone. Instead, it should be based on a detailed and thorough analysis of the company’s strengths, growth prospects, recent performance in the markets, and potential risks (if any) associated with investing in it. So, here’s a detailed analysis of RTX stock to help make a prudent investment decision.
RTX 6-Month Performance
RTX’s shares have gained 23% in the past six months, outperforming the Zacks Aerospace-Defense industry’s surge of 20.3% and the broader Zacks Aerospace sector’s rise of 20.8%. The stock has also outpaced the S&P 500’s return of 4.4%.
Image Source: Zacks Investment Research
Notable gains at the bourses have also been reflected in the share prices of other prominent defense contractors, such as The Boeing Company ((BA - Free Report) ) and General Dynamics ((GD - Free Report) ), over the past six months. Shares of Boeing surged a solid 21.9%, while those of General Dynamics rose 28%.
RTX Stock’s Growth Catalysts
With its extensive portfolio of combat-proven defense products, RTX continues to secure substantial orders from the Pentagon and international allies. In line with its strong track record, the company secured several significant defense contracts in the second quarter, resulting in robust bookings of $12 billion.
These bookings culminated in a solid defense backlog of $92 billion for RTX as of June 30, 2025. Such impressive backlog results make us optimistic about the revenue growth prospects of the company's defense business. This, in turn, should boost its bottom line over the long term.
In line with this, the consensus estimate for RTX’s long-term (three-to-five-year) earnings growth rate is pegged at a solid 9.1%.
Impressively, a steady flow of orders from the Pentagon and other US allies, backed by intensifying geopolitical tensions around the world in recent times, has also been driving top and bottom-line performances of other prime defense contractors. Notably, the consensus estimate for Boeing and General Dynamics’ long-term earnings growth rate is pegged at a solid 17.9% and 10.7%, respectively.
Beyond defense, RTX also enjoys a solid presence in the commercial aerospace market through its Pratt & Whitney and Collins Aerospace segments, which serve both the commercial OEM and aftermarket industries. Notably, the steadily rising global air travel has been playing the role of a key growth catalyst for RTX’s commercial business. Evidently, during the second quarter of 2025, it’s Collins Aerospace Unit registered an 8.9% year-over-year improvement in revenues while sales from Pratt and Whitney grew 12.2%.
Looking ahead, robust growth in commercial aerospace and growing demand for defense products worldwide should substantially boost RTX’s operating results in the near future. Let’s take a sneak peek at RTX’s near-term earnings and sales estimates to check what they suggest.
RTX’s Estimates
The Zacks Consensus Estimate for second-quarter 2025 revenues suggests a solid improvement of 6.5% from the prior-year quarter’s level, while that for earnings implies a decline of 2.8%. The annual estimated figures for 2025 and 2026 indicate improvement on both counts.
The near-term earnings estimates have moved southward over the past 60 days, suggesting declining analysts’ confidence in this stock’s bottom-line growth prospects.
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
Risks to Take Note of Before Choosing RTX
Like many other commercial aerospace industry players, RTX faces the ongoing challenges of global supply-chain disruption, including parts shortages, inflation and labor constraints. These, in turn, have hurt its performance. Looking ahead, International Air Transport Association’s (“IATA”) outlook highlights that aircraft deliveries are 30% below peak levels, creating a record 17,000-aircraft backlog.
With airlines short by 5,400 aircraft and production at roughly 2,000 annually, clearing this backlog could take 3-5 years, as per IATA. This scenario threatens to cause production delay for RTX’s jet engine and thereby the revenue realization from it, exacerbating supply-side pressures in an already constrained aerospace production environment.
Additionally, recent U.S. executive orders issued in February 2025 imposed new tariffs on imports, prompting retaliatory measures from China, the EU and Canada. The resultant turmoil, likely to affect global trade, may, in turn, affect defense stocks such as RTX, BA and GD, which have significant exposure in nations outside the United States.
RTX Stock Trading at a Premium
In terms of valuation, RTX’s forward 12-month price-to-earnings (P/E) is 24.29, a premium to its peer group’s average of 23.81X. This suggests that investors will be paying a higher price than the company's expected earnings growth compared to that of its peers.
Image Source: Zacks Investment Research
How to Play RTX Stock?
To conclude, considering RTX’s premium valuation, declining earnings estimate and persistent supply-chain impact, investors interested in this stock should adopt a wait-and-watch approach for the time being. However, those who already have this Zacks Rank #3 (Hold) stock in their portfolio may continue to do so, taking into account its outperformance at the bourses, solid revenue growth prospects and favorable market dynamics. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.