Now trading at a price of $118.88, RTX has moved -2.4% so far today.
RTX returned gains of 46.6% last year, with its stock price reaching a high of $128.7 and a low of $79.67. Over the same period, the stock outperformed the S&P 500 index by 14.5%. More recently, the company's 50-day average price was $122.31. RTX Corporation, an aerospace and defense company, provides systems and services for the commercial, military, and government customers in the United States and internationally. Based in Arlington, VA, the Large-Cap Industrials company has 185,000 full time employees. RTX has offered a 2.0% dividend yield over the last 12 months.
Increasing Revenues but Narrowing Margins:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $34,701 | $45,349 | $56,587 | $64,388 | $67,074 | $68,920 |
| Gross Margins | 25% | 20% | -3% | 8% | 8% | 5% |
| Net Margins | 15% | 12% | -6% | 6% | 8% | 5% |
| Net Income (M) | $5,269 | $5,537 | -$3,519 | $3,864 | $5,197 | $3,195 |
| Net Interest Expense (M) | $1,032 | $1,591 | $1,366 | $1,322 | $1,276 | $1,505 |
| Depreciation & Amort. (M) | $1,896 | $2,708 | $4,156 | $4,557 | $4,108 | $4,211 |
| Diluted Shares (M) | 810 | 864 | 136 | 1,508 | 1,486 | 1,435 |
| Earnings Per Share | $6.5 | $6.41 | -$2.59 | $2.56 | $3.5 | $2.23 |
| EPS Growth | n/a | -1.38% | -140.41% | 198.84% | 36.72% | -36.29% |
| Avg. Price | $56.57 | $59.76 | $59.32 | $78.81 | $92.68 | $118.94 |
| P/E Ratio | 8.6 | 9.22 | -22.9 | 30.67 | 26.33 | 53.1 |
| Free Cash Flow (M) | $1,203 | $3,953 | $2,539 | $5,008 | $4,880 | $5,468 |
| CAPEX (M) | $1,467 | $1,868 | $1,795 | $2,134 | $2,288 | $2,415 |
| EV / EBITDA | 17.91 | 11.51 | 32.69 | 14.78 | 17.0 | 27.19 |
| Total Debt (M) | $43,917 | $41,197 | $31,576 | $31,351 | $31,289 | $43,638 |
| Net Debt / EBITDA | 8.43 | 4.76 | 10.05 | 2.43 | 2.61 | 4.77 |
| Current Ratio | 1.38 | 1.32 | 1.21 | 1.19 | 1.09 | 1.04 |
RTX has slimmer gross margins than its peers, declining EPS growth, and a highly leveraged balance sheet. On the other hand, the company benefits from rapidly growing revenues and increasing reinvestment in the business and generally positive cash flows. Furthermore, RTX has just enough current assets to cover current liabilities, as shown by its current ratio of 1.04.
RTX's Valuation Is in Line With Its Sector Averages:
RTX has a trailing twelve month P/E ratio of 35.2, compared to an average of 25.42 for the Industrials sector. Based on its EPS guidance of $6.11, the company has a forward P/E ratio of 20.0. The -0.9% compound average growth rate of RTX's historical and projected earnings per share yields a PEG ratio of -40.05. This indicates that its shares are overvalued.In contrast, the market is likely undervaluing RTX in terms of its equity because its P/B ratio is 2.59 while the sector average is 3.2. The company's shares are currently trading 160.0% below their Graham number.
There's an Analyst Consensus of Some Upside Potential for RTX:
The 22 analysts following RTX have set target prices ranging from $113.0 to $157.0 per share, for an average of $134.1 with a buy rating. The company is trading -11.3% away from its average target price, indicating that there is an analyst consensus of some upside potential.
RTX has a very low short interest because 1.1% of the company's shares are sold short. Institutions own 80.6% of the company's shares, and the insider ownership rate stands at 0.08%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $13,935,911,081.
