Now is not the time to buy RTX stock

We believe there is a near-equal mix of good and bad in RTX stock given its overall Moderate operating performance and financial condition. But keeping in mind its Very High valuation, we think that the stock is Unattractive. Here is our multi-factor assessment.

But no matter how attractive, investing in a single stock carries high risk. Trefis High Quality Portfolio and is designed to reduce stock-specific risk while giving upside exposure

Let’s get into details of each of the assessed factors but before that, for quick background: With $208 Bil in market cap, RTX provides aerospace and defense products, aircraft engines, and intelligence services to commercial, military, and government customers worldwide through four specialized business segments.

[1] Valuation Looks Very High

This table highlights how RTX is valued vs broader market. For more details see: RTX Valuation Ratios

[2] Growth Is Moderate

• RTX has seen its top line grow at an average rate of 8.1% over the last 3 years
• Its revenues have grown 15% from $71 Bil to $82 Bil in the last 12 months
• Also, its quarterly revenues grew 5.2% to $20 Bil in the most recent quarter from $19 Bil a year ago.

This table highlights how RTX is growing vs broader market. For more details see: RTX Revenue Comparison

[3] Profitability Appears Weak

• RTX last 12 month operating income was $6.7 Bil representing operating margin of 8.2%
• With cash flow margin of 9.9%, it generated nearly $8.1 Bil in operating cash flow over this period
• For the same period, RTX generated nearly $4.6 Bil in net income, suggesting net margin of about 5.6%

This table highlights how RTX profitability vs broader market. For more details see: RTX Operating Income Comparison

[4] Financial Stability Looks Strong

• RTX Debt was $43 Bil at the end of the most recent quarter, while its current Market Cap is $208 Bil. This implies Debt-to-Equity Ratio of 20.6%
• RTX Cash (including cash equivalents) makes up $5.2 Bil of $165 Bil in total Assets. This yields a Cash-to-Assets Ratio of 3.1%

[4] Downturn Resilience Is Moderate

RTX saw an impact slightly worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• RTX stock fell 33.7% from a high of $104.66 on 18 April 2023 to $69.38 on 5 October 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 9 May 2024
• Since then, the stock increased to a high of $158.40 on 30 July 2025 , and currently trades at $155.49

 
2020 Covid Pandemic

• RTX stock fell 52.2% from a high of $91.87 on 7 February 2020 to $43.91 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 14 January 2022

 
2008 Global Financial Crisis

• RTX stock fell 54.2% from a high of $48.08 on 1 October 2007 to $22.00 on 9 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 27 January 2011

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read RTX Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – S&P 500, Russell, and S&P midcap. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.