Raytheon Technologies (RTX, Financial) has received a significant contract modification valued at $379.78 million. This adjustment is part of an existing agreement focused on the next-generation global positioning system operational control system and its associated support services. With this modification, the total contract value now stands at $4.51 billion, including an option valued at $162.58 million.
The modification finalizes a previously tentative change order, extending the initial contract period from 12 to 16 months and adding an optional 12-month extension. Work on the project is slated for completion by March 31, 2026, with the optional period wrapping up by March 31, 2027. Importantly, no funds are being committed immediately, as the project will continue to receive incremental funding. The contracting entity for this project is the Space Systems Command.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 22 analysts, the average target price for RTX Corp (RTX, Financial) is $135.16 with a high estimate of $160.00 and a low estimate of $99.00. The average target implies an upside of 0.15% from the current price of $134.95. More detailed estimate data can be found on the RTX Corp (RTX) Forecast page.
Based on the consensus recommendation from 26 brokerage firms, RTX Corp's (RTX, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for RTX Corp (RTX, Financial) in one year is $134.14, suggesting a downside of 0.6% from the current price of $134.95. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the RTX Corp (RTX) Summary page.
RTX Key Business Developments
Release Date: April 22, 2025
- Organic Sales Growth: 8% increase.
- Segment Margin Expansion: 120 basis points improvement.
- Free Cash Flow: $900 million improvement versus prior year.
- Commercial Aftermarket Sales: Up 21%.
- Commercial OE Sales: Up 3%.
- Defense Sales: Up 4%.
- Adjusted Sales: $20.3 billion, up 5% overall and 8% organically.
- Segment Operating Profit: $2.5 billion, up 18%.
- Adjusted Earnings Per Share (EPS): $1.47, up 10% from prior year.
- GAAP EPS from Continuing Operations: $1.14.
- Free Cash Flow: $792 million in the quarter.
- Capital Returned to Shareowners: $890 million, primarily through dividends.
- Backlog: $217 billion, up 8% year-over-year.
- Collins Sales: $7.2 billion, up 8% adjusted and 9% organically.
- Pratt & Whitney Sales: $7.4 billion, up 14% adjusted and organic.
- Raytheon Sales: $6.3 billion, down 5% adjusted, up 2% organically.
- Raytheon Book-to-Bill Ratio: 0.70 for the quarter, 1.35 on a rolling 12-month basis.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- RTX Corp (RTX, Financial) reported an 8% organic sales growth in the first quarter of 2025.
- The company achieved a 120 basis points expansion in segment margins, with strong contributions from all business segments.
- Commercial aftermarket sales increased by 21%, and defense sales grew by 4% year-over-year.
- RTX Corp (RTX) generated strong free cash flow, improving by $900 million compared to the previous year.
- The company made significant progress in its innovation pipeline, including FAA certification for the GTF Advantage and advancements in the LTAMDS program.
Negative Points
- RTX Corp (RTX) faces potential cost impacts of $850 million due to tariffs, which could affect profitability if they remain in place.
- The company has not included potential tariff impacts in its outlook for the year, indicating uncertainty in financial projections.
- There are concerns about supply chain disruptions due to tariffs, which could impact operational efficiency.
- The Raytheon segment experienced a 5% decline in adjusted sales due to the divestiture of the Cybersecurity business.
- The company is closely monitoring the dynamic global trade environment, which poses risks to its operations and financial performance.
