On Friday, RBC Capital Markets adjusted its outlook on RTX Corp. (NYSE:RTX), increasing the price target to $115 from the previous $102, while the Sector Perform rating remains unchanged. The adjustment follows RTX Corp.'s announcement of its second-quarter 2024 earnings, which surpassed consensus estimates.
RTX Corp. reported adjusted earnings per share (EPS) of $1.41, which is approximately 9% higher than the consensus estimate of $1.30. The company experienced an organic sales growth of around 10%, driven primarily by a 19% increase in commercial original equipment (OE) sales. In light of these results, RTX Corp. has revised its 2024 sales and EPS forecast upwards, although it has reduced its free cash flow (FCF) guidance by about $1 billion.
The company has also chosen to maintain its existing financial assumptions regarding the GTF powder metal issue, which is seen as an incrementally positive development. Additionally, RTX absorbed a substantial $575 million charge in its defense business, which is considered a beneficial move for its portfolio. Despite these positive indicators, RBC Capital has decided to maintain the Sector Perform rating due to ongoing risks associated with the company.
The revised price target of $115 reflects RBC Capital's updated valuation of RTX Corp. shares following the company's recent financial performance and outlook adjustments. The new target signifies the firm's anticipation of potential share price movement based on the latest developments within the company.
In other recent news, RTX Corp. has seen a series of significant developments.
The company's strong second-quarter performance in 2024 resulted in Baird and UBS analysts raising their price targets for the company's stock, maintaining a neutral rating. This performance was marked by a robust increase in the maintenance, repair, and overhaul (MRO) output for the geared turbofan (GTF) engines and strong organic growth across various subsegments, including aftermarket services and defense.
In a significant expansion of its GTF MRO network, Pratt & Whitney, a unit of RTX Corp., celebrated the induction of the first GTF engine at SR Technics' Zurich facility. This move is aligned with Pratt & Whitney's commitment to expand its MRO capabilities.
On the leadership front, RTX appointed Troy Brunk as the president of Collins Aerospace, succeeding Stephen Timm. Heather Robertson also assumed the role of president of Collins' Mission Systems strategic business unit. These appointments are part of RTX's ongoing efforts to position itself for continued growth and success.
InvestingPro Insights
Following the recent earnings report and RBC Capital Markets' updated price target, RTX Corp. (NYSE:RTX) has shown a robust financial performance with notable highlights. According to real-time data from InvestingPro, RTX Corp. boasts a market capitalization of $150.61 billion, illustrating the company's significant presence in the market. The company's P/E ratio stands at a high 63.21, signaling that investors are willing to pay a premium for RTX's earnings, possibly due to expectations of future growth. Additionally, RTX has experienced a substantial 1-week price total return of 10.37%, reflecting recent investor confidence.
In light of RTX's latest earnings, one of the InvestingPro Tips indicates that management has been aggressively buying back shares, which can often be interpreted as a sign of confidence in the company's future prospects and a potential catalyst for stock price appreciation. Another tip to consider is that RTX has maintained dividend payments for 54 consecutive years, demonstrating a commitment to returning value to shareholders consistently over time.
Investors looking to delve deeper into RTX Corp.'s analytics can find additional insights and tips on InvestingPro. There are 16 more InvestingPro Tips available that can provide a more comprehensive understanding of RTX's financial health and market position. For those interested, remember to use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, which includes these valuable tips.
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