RTX’s primary catalyst is rising backlog, which acts as a massive shock absorber against economic volatility. This backlog represents roughly three full years of revenue already “on the books” and it’s been driven by an unprecedented global demand for air defense systems and the recovery of global air travel.
As geopolitical tensions necessitate increased defense spending worldwide, the firm is the primary beneficiary of long-cycle programs like the Patriot missile system and the F-35 fighter jet.
Meanwhile, the stock trades at 28.5 times the company’s forward earnings forecast. That seems high, but investors are willing to pay more for “mission-critical” earnings that are largely decoupled from the consumer economic cycle.
RTX CORP. (New York symbol RTX; www.rtx.com) took its current form in 2020 through the merger of United Technologies and Raytheon. As part of the merger, the new firm also spun off its Otis (elevator) and Carrier (heating and air conditioning equipment) businesses as separate firms.
RTX has three divisions: Pratt & Whitney makes jet engines (36% of revenue in the latest quarter, 26% of earnings); Collins Aerospace makes aircraft control systems, navigation equipment and cabin interiors (33%, 44%); and Raytheon makes a variety of military equipment such as land and sea-based missile defence and radar systems (31%, 30%).
The U.S. government is the company’s biggest customer, accounting for about 45% of its revenue. That includes military sales to foreign countries through the U.S. government. Customers outside the U.S. supply roughly 48% of its revenue.
Following a review of its operations, in March 2024, RTX sold its Cybersecurity, Intelligence and Services business for $1.3 billion.
In 2025, the company also sold Collins Aerospace’s flight control operations for $1.8 billion, as well as Collins’ Simmonds Precision Products (it makes fuel and proximity sensors) for $765 million.
Thanks to strong demand from commercial airlines for jet engines and aircraft components, as well as rising sales of military equipment, RTX’s revenue in the third quarter of 2025 rose 11.9%, to $22.48 billion from $20.09 billion a year earlier.
Overall earnings before unusual items in the quarter gained 18.6%, to $2.31 billion from $1.95 billion. Due to more shares outstanding, per-share earnings rose 17.2%, to $1.70 from $1.45.
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The company received $37 billion worth of new orders in the third quarter. Its total backlog was $251 billion (59% civilian, 41% military) as of September 30, 2025. That’s up 15.1% from $218 billion at the end of 2024.
In the 12 months to September 30, 2025, the book-to-bill ratio for RTX’s commercial businesses was a healthy 1.71 (a ratio below 1.0 indicates a slowdown in new orders). The book-to-bill ratio for Raytheon was 1.43.
The company continues to earmark large sums to developing new products and improving existing ones. In the latest quarter, it spent $684 million on research (or 3.0% of its revenue). Due to the timing of certain projects, that’s down 8.9% from $751 million (or 3.7% of revenue) a year earlier.
RTX’s growth will keep spurring with the ongoing wars and Nato’s plans
One of the company’s most important new products in the past few years is Pratt & Whitney’s Geared Turbofan (GTF) jet engine, which is much quieter and more fuel efficient than traditional engines. The GTF engine now powers over 6,300 aircraft. That installed base could rise to 13,000 over the next few years.
That’s good news for RTX, as those engines will require regular servicing. In the latest quarter, revenue from maintenance and other services rose 15.5% from a year earlier, and now account for 28% of its total revenue.
Partly due to the buildout of new servicing facilities, RTX planned to spend $2.6 billion on capital upgrades in 2025, which was roughly equal to its 2024 spending.
The company can comfortably afford to keep investing in its businesses. As of September 30, 2025, it held cash of $5.97 billion, while its total debt of $38.26 billion is a moderate 14.5% of its market cap.
RTX also expects to generate free cash flow (regular cash flow less capital expenditures) of between $7.0 billion and $7.5 billion for all of 2025. That will let it keep paying down debt and rewarding investors.
For example, with the June 2025 payment, RTX raised your quarterly dividend by 7.9%, to $0.68 a share from $0.63. The new annual rate of $2.72 yields 1.35%. Based on that rate, the company’s aggregate annual dividends will total roughly $3.6 billion (about 50% of free cash flow). RTX also continues to repurchase its own shares. In the first nine months of 2025, it spent $50 million on buybacks.
The ongoing conflicts in the Middle East and Ukraine continue to fuel demand for the company’s military equipment, particularly its Patriot, Stinger and Tomahawk missile systems.
RTX also stands to gain from NATO’s plan to increase military spending by member countries to 5% of their gross national product by 2035 from the current target of 2%.
These factors have helped lift RTX by 51% in the past year. The stock now trades at 26.5 times the $6.80 a share that the company will probably earn in 2026.
Recommendation in Wall Street Stock Forecaster: RTX Corp. is a buy.
