RTX's Strong Backlog And Pricing Power Offset Defense Risks, Analysts Forecast Big 2025 Upside

RTX Corporation RTX shares are trading lower on Wednesday.

Yesterday, the company reported fourth quarter results. Net sales increased 9% year-over-year to $21.623 billion, beating the consensus of $20.535 billion. Adjusted EPS grew 19% Y/Y to $1.54, above the consensus of $1.38.

Here are the analysts’ takes on the stock:

• BofA Securities reiterated the Buy rating on the stock, with a price forecast of 145.
• RBC Capital Markets analyst Ken Herbert reiterated the Outperform rating on the stock, raising the price forecast to $150 from $140.

BofA Securities: The analysts write that RTX will enter 2025 with strong demand with a backlog of $218 billion.

According to the analysts, the market will favorably view the results and 2025 margin improvement, offsetting concerns about the softer revenue growth outlook.

Overall, analysts note that RTX is a beneficiary of the current commercial aerospace cycle and strong defense demand environment.

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RBC Capital Markets: Herbert notes that investors will view the RTX portfolio favorably, even as headline risk around defense increases.

The analyst highlights that Pratt & Whitney’s strong pricing and volume boosted the fourth quarter results, with GTF engine pricing expected to stay strong.

Herbert adds that the engine aftermarket remains tight, benefiting pricing. The analyst projects 14% growth in GTF engine shipments and improved segment margins in 2025.

Free cash flow estimates for 2025 and 2026 are adjusted, with potential for sentiment improvement and execution driving further gains.

Price Action: RTX shares closed at $125.13 on Wednesday.

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