RTX Corporation Is a Strong Player in a Growth Market

Why It Matters

RTX’s strong backlog and diversified growth drivers position it to outpace peers as aerospace demand and defense spending accelerate, making it a bellwether for the sector’s profitability.

Key Takeaways

• Market cap $268 billion; operates aerospace and defense
• 2025 revenue $88.6 billion; EPS $6.29, shares up 4%
• Order backlog $268 billion equals three years of sales
• Four growth drivers: backlog, aftermarket, defense spending, R&D
• P/E 29.3 for 2026; dividend yield 1.4% rising

Pulse Analysis

Geopolitical uncertainty is reshaping capital allocation, with governments in Europe and the United States earmarking record defense budgets. This macro backdrop fuels demand for advanced missile systems, radar, and stealth platforms—areas where RTX’s Raytheon unit excels. Simultaneously, the civilian aerospace sector is rebounding, projected to grow 5‑8% annually, creating a fertile environment for Pratt & Whitney’s engines and Collins Aerospace’s cabin and avionics solutions. RTX’s integrated supply chain across these divisions gives it a unique advantage in securing long‑term contracts like the F‑35 program, where components from all three business units converge.

Financially, RTX delivered an impressive $88.6 billion in 2025 sales, surpassing its own guidance and lifting adjusted EPS to $6.29. The company’s order backlog swelled to $268 billion, providing visibility into three years of revenue and enabling economies of scale that improve margins. Aftermarket services for commercial aircraft are expanding at double‑digit rates, delivering higher‑margin cash flow, while defense spending hikes in Europe and the U.S. bolster missile and radar sales. R&D spending of $7.4 billion underscores a commitment to next‑generation propulsion, AI‑driven analytics, and advanced materials, ensuring the pipeline remains robust.

For investors, RTX presents a compelling blend of growth and stability. A forward P/E of 29.3 for 2026, coupled with a rising dividend yield of 1.4%, signals reasonable valuation relative to its earnings trajectory. The company’s diversified revenue streams, sizable backlog, and disciplined capital allocation reduce exposure to cyclical downturns. As aerospace demand steadies post‑COVID and defense budgets continue to climb, RTX is well‑positioned to translate its strategic advantages into sustained earnings acceleration, making it a standout candidate for portfolios seeking exposure to high‑growth, defense‑linked industrials.

RTX Corporation is a strong player in a growth market

By Dr Mike Tubbs · Published 9 February 2026

Donald Trump’s desire to acquire Greenland for the US may be an issue now close to resolution, but there are lots of other uncertainties in the world that could affect equity investors – the imposition of further tariffs by the US, a Chinese invasion of Taiwan (more likely now that president Xi Jinping has strengthened his position), war in Iran and further Russian attacks in Europe now that the US is giving Europe and NATO lower priority.

Investors have to weigh the influence of these factors on markets as well as deciding whether AI is in a bubble or is a continuing growth story. Investors are therefore looking for strong companies with substantial market share in predictable and profitable growth markets. A good example is American firm RTX Corporation (NYSE: RTX).

RTX has a market capitalisation of $268 billion and operates in both the civilian aerospace sector and defence, where it makes munitions, missile systems, fighter and bomber engines, and aircraft components. These are growth markets. Civilian aerospace is predicted to grow at a compound annual growth rate of 5 %–8 % or more over the next five years. Defence is also expected to grow strongly as European countries raise defence budgets. The US also wants to raise its defence budget from $900 billion in 2026 to $1.5 trillion in 2027.

RTX is the force behind the F‑35

RTX has three divisions of comparable size – Collins Aerospace, Pratt & Whitney, and Raytheon (missiles and munitions).

• Collins Aerospace provides products and services for commercial and military aerospace (cockpit and cabin interiors), helicopters, space systems, and airport and air‑traffic management systems.

• Pratt & Whitney is the second‑largest of the three global aero‑engine suppliers and provides engines for all types of commercial aircraft, with a major share of regional jet engines.

• Raytheon makes missiles, Patriot anti‑missile systems, “iron dome” protective systems, radars, sensors and high‑powered laser systems.

The F‑35 fifth‑generation stealth fighter contains components and systems from all three RTX divisions. Pratt & Whitney provides the engine, Collins provides both the helmet‑mounted display and the enhanced power and thermal management system, while Raytheon provides medium‑ and short‑range missiles, smart bombs and laser‑guided precision bombs.

RTX’s 2024 turnover was $80.7 billion, representing 11 % organic sales growth from 2023, with an order backlog of $218 billion. In the company’s words, this represents “unprecedented demand”. Adjusted sales for the full year of 2025 were projected, in January 2025, to be $83 billion–$84 billion, with adjusted earnings per share (EPS) of $6.00–$6.15. In the event, the 2025 results announced on 27 January delivered turnover of $88.6 billion and adjusted EPS of $6.29 and the shares rose nearly 4 %. The adjustments allow for the divestment of a non‑core business from Collins. The January 2026 order backlog had increased to $268 billion.

RTX’s four drivers of growth

1. Large and expanding backlog – gives clear visibility of future revenues. As production ramps up to reduce the backlog, RTX benefits from scaling up, which cuts costs and, alongside internal efficiency drives, expands margins so earnings grow faster than sales.

2. Commercial aerospace aftermarket recovery – post‑COVID demand for spare parts, maintenance and retrofit work for Collins and Pratt & Whitney is growing at double‑digit rates and carries higher margins.

3. Expanding global defence budgets – drive demand for missile systems, radar and electronic‑warfare technology.

4. Heavy investment in R&D – fuels next‑generation aircraft propulsion systems, advanced materials and AI data analytics to enhance efficiency.

A look under the bonnet

RTX’s large order backlog and four growth drivers suggest the firm can look forward to several years of profits growing faster than sales.

• 2025 results (to end‑December) showed sales of $88.6 billion, operating profit of $10.85 billion, adjusted EPS of $6.29, free cash flow of $7.9 billion and an order backlog of $268 billion.

• A total of $138 billion of new orders were added in 2025, delivering organic growth of 11 % for sales and 10 % for EPS.

• Guidance for 2026: sales of $92 billion–$93 billion, EPS of $6.60–$6.80 and free cash flow of $8.25 billion–$8.75 billion.

The fourth quarter of the 2025 financial year was exceptional, with sales of $24.2 billion, up 14 % organically. Pratt & Whitney was the star division, with sales up 25 %; this was driven by a 21 % rise in commercial aftermarket sales, a 28 % rise in commercial original‑equipment sales and a 30 % rise in military sales due to higher production of F‑35s.

Growth pointers in the 2025 results include:

• $2.63 billion in capital expenditure,

• $7.4 billion for research and development,

• a 20 % rise in munitions sales (including the GEM‑T guided tactical missile, the AMRAAM medium‑range air‑to‑air missile and the Coyote small anti‑drone missile).

RTX is in the enviable position of having all three divisions growing profitably, with clear growth drivers and an order backlog of three years of sales. At the recent share price of $199.3, the P/E for 2026 is 29.3, falling to 24.2 for 2028. The forward dividend yield is 1.4 % and the dividend has been rising since 2021. The shares are up 59.7 % over the past year and should continue rising.

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About the author

Dr Mike Tubbs – Highly qualified (BSc, PhD, CPhys, FInstP, MIoD) expert in R&D management, business improvement and investment analysis. Dr Tubbs worked for decades on the “inside” of corporate giants such as Xerox, Battelle and Lucas, learning the keys to successful investing. He created the R&D Scorecard, presented annually to the Department of Trade & Industry and the European Commission as a guide for European businesses on improving prospects through research and development. He has been a contributor to MoneyWeek for many years, with a particular focus on R&D‑driven growth companies.