On Monday, TD Cowen expressed continued confidence in RTX Corp (NYSE:RTX), maintaining a Buy rating and a price target of $142.00.
The firm highlighted RTX's significant third-quarter defense orders, which demonstrated a book-to-bill ratio of over 1.3, with a notable number of orders coming from international customers.
This trend is seen as a positive influence on RTX's journey toward achieving its defense margin goals, with potential for a more than 200 basis points increase, translating to an additional earning opportunity of over $0.40 per share in the next four years.
The analyst noted that costs associated with Pratt & Whitney's Geared Turbofan (GTF) Aircraft on Ground (AOG) services appear to be on track. Additionally, the robustness of the commercial aerospace aftermarket is believed to counterbalance any negative effects from the Boeing (NYSE:BA) strike.
In other recent news, Deutsche Bank also upgraded RTX Corp's stock from Sell to Hold, anticipating third-quarter earnings per share to surpass Wall Street expectations.
RTX Corp has been awarded a contract by the Defense Advanced Research Projects Agency (DARPA) to develop ultra-wide bandgap semiconductors, which could enhance the performance of electronic devices in defense applications. In addition, the company's division, Pratt & Whitney, opened a new $255 million military engine facility in Oklahoma City, expected to create an additional 100 full-time jobs over the next five years.
The U.S. Department of State approved a potential sale of Stinger missiles to Egypt, valued at approximately $740 million, with RTX Corp as the principal contractor. Furthermore, RTX Corp was awarded a $525 million contract by the U.S. Navy for the production of Enhanced Sea Sparrow Missiles (ESSM) Block 2.
InvestingPro Insights
RTX Corp's recent performance aligns with TD Cowen's positive outlook. According to InvestingPro data, RTX has shown impressive market performance with a 51.14% year-to-date price total return and an even more striking 83.61% return over the past year. This strong performance has brought the stock price to 99.51% of its 52-week high, trading at $124.91 as of the previous close.
InvestingPro Tips highlight that RTX is a prominent player in the Aerospace & Defense industry, which supports TD Cowen's focus on the company's defense orders and commercial aerospace segments. The tip noting that RTX "has maintained dividend payments for 54 consecutive years" underscores the company's financial stability, which is crucial for long-term investors.
Additionally, the InvestingPro Tip indicating that "net income is expected to grow this year" aligns with TD Cowen's projection of potential earnings growth from margin improvements. However, investors should note that RTX is currently "trading at a high earnings multiple," which may reflect the market's high expectations for the company's future performance.
For readers interested in a more comprehensive analysis, InvestingPro offers 13 additional tips for RTX, providing a deeper understanding of the company's financial health and market position.
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