On Wednesday, Susquehanna reaffirmed its Positive rating on shares of RTX Corp. (NYSE: RTX) and increased the price target to $150.00, up from the previous $140.00. The adjustment comes after RTX Corp. reported third-quarter earnings that surpassed expectations.
RTX Corp. delivered a strong performance in the third quarter of 2024, with notable revenue growth and improved segment margins compared to the third quarter of 2023. The company's adjusted earnings per share (EPS) for the quarter came in at $1.45, which was approximately 8% higher than the consensus estimates.
In response to the positive results, RTX Corp. has updated its full-year 2024 EPS guidance, raising it by $0.14 at the midpoint to a new forecast of $5.54.
The company's robust quarterly results have been attributed to a combination of factors. There is a strong demand for RTX's products in both the commercial original equipment manufacturer (OEM) and aftermarket sectors. Moreover, the demand in the Defense sector remains solid, both domestically and internationally.
RTX Corp.'s backlog has seen significant growth, now standing at $221 billion, an increase from $206 billion at the end of the second quarter of 2024. According to Susquehanna, this positions RTX Corp. favorably for sustained growth in earnings and free cash flow in the foreseeable future.
The firm's outlook on RTX remains optimistic, citing the compelling investment thesis based on the company's strong demand across its business segments and the substantial backlog.
In other recent news, RTX Corp has been the focus of several analyst upgrades following strong financial performance. RBC Capital Markets raised its price target from $115 to $130, following a robust third-quarter earnings report where RTX outperformed expectations. The company reported an organic revenue growth of 8%, driven by an 11% increase in commercial aerospace maintenance growth and a 10% rise in defense sector growth.
UBS also raised its price target for RTX to $133, citing robust growth in the military sector. Despite the impact of the Boeing (NYSE:BA) strike on original equipment demand, RTX adjusted its revenue outlook and anticipates a significant increase in margins, particularly in Collins Military and Commercial Aftermarket sectors.
Goldman Sachs (NYSE:GS) maintained a neutral rating on RTX, acknowledging the company's solid long-term fundamentals but expressing concerns over the Collins division's margin, defense market exposure, and uncertainties surrounding the Geared Turbofan engine.
BofA Securities increased its price target on RTX to $145, highlighting the company's strong performance in the Defense sector and steady Commercial Aerospace operations. RTX reported a record backlog of $221 billion and returns of $10.3 billion to shareholders, indicating strong future revenue potential. These recent developments reflect the company's robust financial performance and promising prospects in the aerospace and defense sectors.
InvestingPro Insights
RTX Corp.'s strong performance and positive outlook are further supported by real-time data from InvestingPro. The company's revenue growth of 17.82% over the last twelve months as of Q3 2024 aligns with the robust demand mentioned in the article. Moreover, RTX's impressive market cap of $166.71 billion underscores its significant position in the Aerospace & Defense industry.
InvestingPro Tips highlight that RTX has raised its dividend for 3 consecutive years and has maintained dividend payments for 54 consecutive years, indicating a strong commitment to shareholder returns. This is particularly relevant given the company's recent earnings beat and increased full-year EPS guidance.
The stock's strong performance is evident in its 76.04% price total return over the past year, and it's currently trading near its 52-week high at 97.54% of that level. These metrics reinforce Susquehanna's positive rating and increased price target.
For investors seeking more comprehensive analysis, InvestingPro offers 11 additional tips for RTX Corp., providing a deeper understanding of the company's financial health and market position.
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