On Tuesday, RTX Corp (NYSE:RTX) retained its Buy rating and $115.00 stock price target from TD Cowen. The firm's stance comes as RTX Corp, known for its significant aftermarket presence, which accounts for roughly 60% of its profits, approaches its second-quarter earnings report. The company is anticipated to surpass earnings per share (EPS) expectations due to a favorable shift towards aftermarket sales.
TD Cowen's outlook on RTX Corp is notably optimistic as the company has experienced an 8% decline in its stock value during June. Despite this recent drop, RTX Corp is highlighted as a top pick by the firm, which underscores the potential undervaluation when compared to its competitors. RTX Corp is currently trading at a 25% discount relative to General Electric (NYSE:GE) and holds a peer-low 31% net buy rating.
The forecast for the second quarter suggests that RTX Corp could deliver an earnings beat, a scenario bolstered by its robust aftermarket business. This segment of the company is poised to contribute positively to the overall financial performance, potentially leading to favorable outcomes for shareholders.
As RTX Corp gears up for its second-quarter performance disclosure, the company's stock remains under the spotlight. With the backing of a Buy rating and a steady price target from TD Cowen, investors and market watchers will be keenly observing the upcoming earnings report to gauge the company's financial health and market position.
In summary, RTX Corp's current market standing and the anticipation of a strong second-quarter earnings report have kept the company in a favorable position according to TD Cowen. With a significant portion of its profits stemming from the aftermarket sector, RTX Corp is expected to demonstrate its resilience and potential for growth in the upcoming financial disclosures.
In other recent news, Collins Aerospace, a subsidiary of RTX Corp, is in talks with NASA to terminate its contract for producing new spacesuits for International Space Station astronauts. This could potentially delay the replacement of the current spacesuits, which have been in use for the past four decades.
Meanwhile, RTX's subsidiary, Blue Canyon Technologies, has been selected by NASA to construct two 12U CubeSat buses for the PolSIR mission aimed at improving climate predictions.
In defense-related developments, RTX's business unit, Raytheon (NYSE:RTN), secured a $677 million contract to continue manufacturing AN/SPY-6(V) radars for the U.S. Navy. This contract increases the total number of radars ordered to 38.
The Patriot missile defense system, produced by Raytheon Technologies (NYSE:RTX) and Lockheed Martin (NYSE:LMT), has seen increased demand due to the ongoing conflict in Ukraine, leading to a ramp-up in production.
Raytheon has also won a $506 million NASA contract to develop the Landsat Next Instrument Suite (LandIS). The new suite of space instruments will enhance Earth observation capabilities and is set to deliver up to three times the spatial, temporal, and spectral resolution of its predecessors. These are some of the recent developments within RTX Corp and its subsidiaries.
InvestingPro Insights
As RTX Corp (NYSE:RTX) approaches its second-quarter earnings report, insights from InvestingPro provide a deeper understanding of the company's financial landscape. With a market capitalization of $132.03 billion and a high P/E ratio of 40, reflecting expectations of future earnings growth, RTX's financial metrics offer a mixed picture.
The company's revenue has grown by 3.56% over the last twelve months as of Q1 2024, indicating a steady business expansion. Moreover, RTX has maintained dividend payments for an impressive 54 consecutive years, with a current dividend yield of 2.53%, showcasing its commitment to returning value to shareholders.
Two key InvestingPro Tips for RTX include the company's aggressive share buyback strategy, which can signal confidence from management in the company's future, and the expectation of net income growth this year. These factors, combined with RTX's reputation as a prominent player in the Aerospace & Defense industry, may contribute to the positive outlook held by TD Cowen.
For investors seeking a comprehensive analysis of RTX and additional insights, InvestingPro offers a total of 10 InvestingPro Tips to aid in informed decision-making. Utilize coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription for more detailed analytics and tips.
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