✈️ RTX CORPORATION (NYSE: RTX)

STOCKINSIGHT™ STOCK INITIATION REPORT

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📋 MANAGEMENT SUMMARY

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• We maintain a BUY / OVERWEIGHT rating on RTX.

• At $216.65, RTX remains one of the highest-quality aerospace and defense companies globally, benefiting from record commercial aerospace demand, rising global defense spending, and an all-time high backlog.

• RTX delivered an outstanding Q2 2026 earnings report on July 23, beating Wall Street expectations on both revenue and earnings while raising full-year 2026 guidance for the third time this year.

• The company continues to benefit from strong demand across all three major businesses—Pratt & Whitney, Collins Aerospace, and Raytheon—with commercial aerospace remaining exceptionally strong and defense orders accelerating worldwide.

• Key catalysts include continued aircraft production increases, defense spending growth across NATO countries, and further free cash flow expansion.

🟢 RATING: BUY / OVERWEIGHT

🎯 12-MONTH PRICE TARGET: $245

💵 CURRENT PRICE: $216.65

📈 IMPLIED UPSIDE: +13.1%

💰 DIVIDEND YIELD: ~1.3%

🗓️ LATEST EARNINGS: Q2 2026 – Reported July 23, 2026

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⚡ QUICK SNAPSHOT

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🏢 Market Cap: ~$285B

✈️ Core Businesses

• Collins Aerospace

• Pratt & Whitney

• Raytheon Defense

📦 Investment Theme

Commercial Aerospace + Defense Growth + Free Cash Flow Expansion

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📈 STOCK PERFORMANCE

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💵 Current Price: $216.65

🟢 Trading near record highs.

🟢 One of the strongest-performing industrial stocks over the past 12 months.

🟢 Supported by strong earnings momentum and rising guidance.

📊 Relative Performance

✅ Commercial aviation cycle remains very strong.

✅ Defense budgets continue expanding globally.

✅ Record backlog provides excellent revenue visibility.

⚠️ Premium valuation compared with historical averages.

🔥 Momentum Trend

➡️ Strong long-term bullish trend with institutional accumulation.

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📰 WHAT CHANGED RECENTLY?

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RTX delivered one of the strongest earnings reports in the industrial sector.

Q2 2026 Highlights

🟢 Revenue: $24.7B, up 14% YoY

🟢 Adjusted EPS: $1.89 vs. $1.66 expected

🟢 Operating Cash Flow: $3.5B

🟢 Free Cash Flow: $2.9B

🟢 Backlog reached a record $289B

🟢 2026 EPS and revenue guidance increased

The strength was broad-based across commercial aerospace and defense, prompting management to raise its full-year outlook.

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📰 RECENT NEWS FLOW (LAST 2 WEEKS)

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🟢 Positive Developments

✅ RTX reported a significant earnings and revenue beat while raising full-year guidance, reinforcing confidence in continued earnings growth.

✅ The company ended the quarter with a record $289 billion backlog, providing exceptional long-term revenue visibility across commercial aerospace and defense.

🔴 Negative Developments

⚠️ Supply-chain constraints continue to limit the pace of aircraft engine production, particularly at Pratt & Whitney.

⚠️ Following the strong rally, RTX now trades at a premium valuation relative to many industrial and defense peers, increasing the importance of continued execution.

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🚀 INVESTMENT THESIS

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RTX continues evolving from:

➡️ Traditional aerospace manufacturer

into

➡️ Integrated global aerospace and defense leader with multiple secular growth drivers.

Key positives:

✅ Record backlog

✅ Commercial aviation recovery

✅ Rising defense spending

✅ Strong free cash flow

✅ Consistent guidance increases

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🔥 3 CORE BULLISH PILLARS

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1️⃣ Commercial Aerospace Recovery

✔ Engine deliveries increasing

✔ Airline demand remains robust

✔ Large aftermarket opportunity

Our View:

➡️ Commercial aerospace should remain RTX’s primary growth engine over the next several years.

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2️⃣ Defense Spending Boom

✔ NATO rearmament

✔ Missile demand

✔ Air-defense systems

✔ Classified defense programs

Our View:

➡️ Defense spending provides durable long-term growth regardless of the economic cycle.

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3️⃣ Record Backlog

✔ $289B backlog

✔ Multi-year revenue visibility

✔ Strong cash flow generation

Our View:

➡️ Few industrial companies have comparable earnings visibility.

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📊 FINANCIAL SNAPSHOT

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💰 FY26E (Current Fiscal Year)

Revenue: $95–96B (raised guidance)

Adjusted EPS: $7.10–$7.25 (raised guidance)

Free Cash Flow: ~$9B+

Dividend: Growing

💰 FY27E

Revenue Growth: Mid-to-High Single Digits

EPS Growth: High Single Digits

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📈 OUR VIEW VS WALL STREET

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Commercial Aerospace

Consensus: Strong

Our View: Even stronger

Defense

Consensus: Positive

Our View: Multi-year growth cycle

Valuation

Consensus: Premium

Our View: Justified by execution

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📅 POSITIVE CATALYSTS

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🟢 Higher aircraft production

🟢 Additional defense contracts

🟢 Margin expansion

🟢 Further guidance increases

🟢 Free cash flow growth

🟢 Dividend increases

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⚠️ NEGATIVE CATALYSTS

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🔴 Supply-chain disruptions

🔴 Delays in aircraft production

🔴 Government budget uncertainty

🔴 Cost inflation

🔴 Rich valuation

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📊 SENTIMENT & POSITIONING

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✅ Institutional ownership remains extremely high.

✅ Aerospace remains one of the strongest industrial sectors.

✅ Analysts continue raising earnings estimates following Q2 results.

⚠️ Expectations are now elevated after multiple guidance increases.

Market Sentiment:

➡️ Strongly bullish.

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🐂 BULL VS 🐻 BEAR CASE

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🐂 Bull Case: $260

✔ Continued earnings beats

✔ Strong defense orders

✔ Faster aerospace production

✔ Multiple expansion

🐻 Bear Case: $185

⚠️ Aerospace slowdown

⚠️ Production bottlenecks

⚠️ Defense budget delays

🎯 Base Case: $245

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🎯 SUPPORT & RESISTANCE LEVELS

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🟢 Key Support Levels

S1: $210

S2: $200

S3: $190

🔴 Key Resistance Levels

R1: $220

R2: $230

R3: $245

📌 Trading Interpretation

➡️ Holding above $210 keeps the long-term uptrend firmly intact.

➡️ A breakout above $220 could trigger another move toward $230-$245.

➡️ Following the excellent Q2 results and raised guidance, buyers remain in control.

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📉 TECHNICAL SETUP

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📈 Long-Term Trend: Strong Bullish

📊 Relative Strength: Strong

🔥 Momentum: Positive

⚠️ Volatility: Low

💰 Valuation: Fair to Slightly Premium

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✅ FINAL TAKE

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RTX continues to execute exceptionally well. The latest quarter featured double-digit revenue growth, a meaningful EPS beat, record backlog, strong free cash flow, and another increase to full-year guidance—all reinforcing the strength of its aerospace and defense franchises.

At $216.65, the shares are no longer a deep value opportunity, but they remain attractive for long-term investors seeking exposure to two of the strongest secular themes in the market: commercial aerospace recovery and sustained global defense spending.

Investors benefit from:

✅ Record $289B backlog

✅ Industry-leading aerospace franchises

✅ Strong defense demand

✅ Rising free cash flow

✅ Consistent earnings growth

We continue to view RTX as one of the premier long-term industrial holdings.

🟢 RATING: BUY / OVERWEIGHT

🎯 PRICE TARGET: $245

📈 UPSIDE POTENTIAL: +13.1%

Risk Level: 🔥🔥 Low-Medium

Reward Potential: 🔥🔥🔥 Medium-High

Conviction: ⭐⭐⭐⭐⭐ (9/10)

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