Price-to-Earnings Ratio
Price-to-Sales Ratio
Return on Equity
Gross Profit Margin
Interest Coverage Ratio
Debt to Assets Ratio
Strong Financial Performance 📈
Significant Backlog and Demand 📊
Innovative Capabilities and Investments 💡
Positive Growth Outlook 🌱
Strong International Demand 🌍
Continued Innovation and Development 🚀
High Price-to-Cash Flow Ratio
EV/EBITDA Ratio
Net Profit Margin
Operating Profit Margin
Current Ratio
Quick Ratio
Challenges in Supply Chain 🏗️
Potential Headwinds from Inflation 📉
Overall, RTX demonstrates strong business quality with solid financial performance, robust demand, and a commitment to innovation. Future prospects appear positive, supported by a significant backlog and strategic investments, although challenges remain in the supply chain and inflationary pressures.
Analysis Date: January 28, 2025
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$137.74
Current Market Price: $117.51
IV/P Ratio: 1.17x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
15.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for RTX
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (32.83)
P/B ratio ≤ 1.5 (2.61)
Current ratio ≥ 2.0 (0.99x)
Long-term debt < Net current assets (-110.27x)
Margin of safety (15.0%)
RTX does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
A return on equity of 7.93% indicates the company is generating a decent return on shareholders' equity, which is a positive sign of management efficiency.
The gross profit margin of 19.09% shows that the company retains a solid portion of revenue after direct costs, indicating effective production and pricing strategies.
The net profit margin of 5.91% suggests that the company has room for improvement in turning revenue into actual profit, which may raise concerns for investors.
An operating profit margin of 8.75% indicates limited profitability from operations, suggesting the need for operational improvements.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
7.93%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
0.91%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
19.09%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
5.91%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
An interest coverage ratio of 3.58 shows that the company can comfortably cover its interest expenses, indicating financial stability.
With a debt to assets ratio of 24.89%, the company maintains a relatively low level of debt compared to its total assets, indicating less financial risk.
A current ratio of 0.99 indicates that the company may struggle to cover its short-term liabilities with its current assets, signaling potential liquidity issues.
The quick ratio of 0.74 suggests that the company may not have enough liquid assets to cover its short-term obligations, which could lead to liquidity concerns.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.67x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
0.99x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
RTX delivered $80.8 billion in adjusted sales for 2024, up 11% organically, with all three segments contributing to growth. The company showcased substantial free cash flow generation of $4.5 billion, indicating robust operational efficiency.
RTX ended the year with a backlog of $218 billion, marking an 11% increase year-over-year. This includes a record $93 billion backlog for defense, demonstrating strong demand for critical defense products and services.
RTX invested over $7.5 billion in R&D to drive future growth and innovation. The company is leveraging AI and advanced technologies to enhance productivity and operational efficiency.
Despite improvements, some supply chain constraints persist, especially in areas like isothermal forging and structural castings, which are critical for meeting production demands.
For 2025, RTX expects adjusted sales to range from $83 billion to $84 billion, translating to organic growth of 4% to 6%. This is supported by continued strength in commercial and defense sectors.
The company anticipates sustained international demand for defense products, particularly in NATO and Indo-Pacific regions, where allies are increasing defense spending.
RTX plans to maintain a strong focus on innovation with substantial investments in future technologies, including autonomy, AI, and advanced materials, which are expected to drive further growth.
There are ongoing concerns regarding inflation impacting margins, particularly in the Collins and Pratt segments, which may affect profitability in the near term.