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RTX trades against a final fair-value range of $134.31-$236.65, with the midpoint set by the accepted valuation synthesis rather than earlier draft model outputs.
Testing a scenario where commercial flight hours normalize below historical trends alongside flat US defense budgets. Under these conditions, the commercial aftermarket premium fades prematurely, and RTX's normalized operating marginOperating marginOperating income (EBIT) divided by revenue. Captures profitability after both direct costs and operating expenses but before interest, tax, and non-operating items. compresses toward 10%, effectively eliminating the current upside and anchoring valuation closer to the $134 bear-case target.
Protracted shortages in titanium and specialized aerospace components halt commercial aircraft deliveries, severely delaying backlog conversion and capping near-term cash generation.
A significant shift in US geopolitical strategy or domestic fiscal policy freezes defense spending, crushing growth for Raytheon and capping segment margins.
Severe cost overruns on legacy fixed-price defense development programs destroy segment profitability, requiring massive cash outflows to fulfill contractual obligations.
| Line item | 2022-12-31 | 2023-12-31 | 2024-12-31 | 2025-12-31 | Trend |
|---|---|---|---|---|---|
| Revenue | $67.07B | $68.92B+2.8% | $80.74B+17.2% | $88.60B+9.7% | +9.7% |
| Gross profit | $13.67B | $12.09B | $15.41B | $17.79B | +9.2% |
| Operating income | $5.50B | $3.56B | $6.54B | $9.30B | +19.1% |
| Net income | $5.20B | $3.20B-38.5% | $4.77B+49.1% | $6.73B+41.1% | +9.0% |
| EPS (diluted) | $3.50 | $2.23 | $3.55 | $4.96 | +12.3% |
| EBITDA | $11.53B | $9.70B | $12.53B | $14.95B | +9.1% |
| R&D | $2.71B | $2.81B | $2.93B | $2.81B | +1.2% |
| SG&A | $5.57B | $5.81B | $5.81B | $6.10B | +3.0% |
Cash-flow quality is reflected in the OCFOperating cash flowCash generated from the company's core operations after working-capital changes but before capital expenditures. The first line of the cash-flow statement. / net incomeNet IncomeNet Income is an income-statement line item used to reconcile revenue to operating profit, pre-tax income, net income, or per-share earnings. It should be compared across periods and against peer disclosure conventions., accounting-quality, and ROICROICReturn on invested capital. Operating profit (after tax) divided by invested capital. The single best gauge of capital-efficiency. Spread over WACC = economic value created. rows above.
Capital allocation should be evaluated against reinvestment needs, balance-sheet strength, and shareholder returns.
| Deterioration versus the report thesis |
| Further delays or cost revisions in Pratt & Whitney GTF engine fleet fixes. | Monitor | Deterioration versus the report thesis |
| CapEx-to-revenue ratio spiking above historical 4% averages without revenue yield. | Monitor | Deterioration versus the report thesis |
