RTX Stock: A Promising Investment Opportunity with Raytheon's Ambitious Plans

RTX Corporation, the company behind Pratt & Whitney engines, Collins Aerospace systems, and Raytheon missiles and radars, has been performing well despite its stock price being 14% below its 52-week high. With a record $271 billion backlog, demand has rarely looked stronger, but the market is pricing execution risk, not demand risk.

At the Bernstein Strategic Decisions Conference, CEO Chris Calio emphasized the importance of execution, framing the record backlog as a promise the company still has to deliver on. This shift in focus is crucial for RTX stock, as the bull case no longer hinges on winning work, but on building it.

Raytheon's recent $515 million follow-on U.S. Navy contract for its SPY-6 family of radars is a significant proof of the company's ability to ramp up production. The contract, combined with an $800 million facility investment, is expected to double SPY-6 output by 2028.

The company's backlog is not just impressive in terms of its size, but also in its composition. With $271 billion in committed demand, RTX is well-positioned for growth. Additionally, the company has framework agreements with the Department of War, covering Tomahawk, AMRAAM, and the Standard Missile family, which are not included in the $271 billion backlog.

RTX is spending roughly $10 billion this year on R&D and capital expenditure, much of it on automation and capacity. This investment is crucial in addressing the supply-chain constraints that are currently limiting the company's ability to fill orders.

The geared turbofan (GTF) recovery is also a significant story within RTX. After a costly inspection program, the aircraft-on-ground (AOG) count is lifting, with a 15% decline in the first quarter. This recovery is expected to pay off in margin, with Pratt's commercial aftermarket growing 19% year over year in Q1.

On a forward EV/EBITDA basis, RTX trades at around 17.6x, below diversified industrial GE and aerospace supplier Howmet, but above pure defense primes like Lockheed Martin and General Dynamics. The stock's valuation depends on the company's ability to execute on its backlog and deliver on its promises.

TIKR's mid-case valuation of RTX, realized on December 31, 2030, values the company at around $218, around 19% above today's price, or roughly 4% annualized. The revenue drivers anchoring this valuation are defense and commercial aftermarket, with the margin driver being Raytheon's shift toward mature, high-volume radar and effector production.

Investors should watch RTX's Q2 2026 earnings, expected in late July, for signs of continued execution and growth. A decline in the GTF AOG count and 20%-plus MRO growth would confirm the execution thesis, while a flattening AOG curve or signs of supply-chain constraints would be a warning sign.