Stock Analysis & Valuation RTX Corporation (5UR.DE)

• Previous Close: €167.22
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	71.30	-57
Intrinsic value (DCF)	49.60	-70
Graham-Dodd Method		n/a
Graham Formula	76.30	-54

Strategic Investment Analysis

Company Overview

RTX Corporation (formerly Raytheon Technologies) is a global leader in aerospace and defense, serving commercial, military, and government customers worldwide. Headquartered in Arlington, Virginia, RTX operates through three key segments: Collins Aerospace, Pratt & Whitney, and Raytheon. Collins Aerospace specializes in aviation systems, cabin interiors, and aftermarket services, while Pratt & Whitney is renowned for its aircraft engines and auxiliary power units. The Raytheon segment focuses on advanced defense technologies, including threat detection and mitigation systems. With a rich history dating back to 1934, RTX plays a pivotal role in the Industrials sector, particularly in Aerospace & Defense, driving innovation in aviation safety, efficiency, and national security. The company's diversified portfolio and strong aftermarket services provide resilience across economic cycles, making it a cornerstone of global aerospace infrastructure.

Investment Summary

RTX Corporation presents a compelling investment case with its diversified aerospace and defense portfolio, stable government contracts, and strong aftermarket services. The company's $156.9B market cap and moderate beta (0.59) suggest lower volatility relative to the broader market. However, its net income of $4.77B (EPS: $3.68) reflects margin pressures, possibly from supply chain challenges in its Pratt & Whitney segment. Positive operating cash flow ($7.16B) and a solid dividend ($2.32/share) enhance appeal, but high total debt ($42.9B) warrants monitoring. Long-term growth hinges on defense budget trends and commercial aviation recovery.

Competitive Analysis

RTX holds a competitive edge through its vertically integrated segments, combining Collins Aerospace's avionics, Pratt & Whitney's propulsion systems, and Raytheon's defense technology. This integration allows cross-segment synergies, particularly in military aviation where Raytheon's systems pair with Pratt & Whitney engines. Collins' aftermarket services (30% of segment revenue) provide recurring income, offsetting cyclical new equipment sales. However, Pratt & Whitney faces intense competition in narrowbody engines (vs. CFM International), and recent engine recalls may dent its reputation. Raytheon's strength in missile defense (e.g., Patriot systems) is countered by reliance on U.S. defense spending. RTX's scale and R&D spend ($8B annually) outpace smaller rivals, but Boeing and Lockheed Martin challenge its defense dominance. The 2023 rebranding to RTX aims to unify its legacy Raytheon and United Technologies divisions, though integration risks persist.

Major Competitors

• Boeing Company (BA): Boeing leads in commercial aircraft (737, 787) but lags in defense diversification compared to RTX. Its 737 MAX crises and supply chain woes have eroded margins, though its larger scale in jets provides pricing power. Weakness in aftermarket services (vs. Collins Aerospace) is a drawback.
• Lockheed Martin (LMT): Lockheed dominates military aviation (F-35) and space, overlapping with Raytheon's missile systems. Its higher defense concentration (98% revenue) makes it less diversified than RTX. Strong free cash flow but faces budget cyclicality.
• General Electric (GE): GE Aerospace (spun off in 2024) competes with Pratt & Whitney via CFM International (joint venture with Safran). GE's LEAP engine leads in fuel efficiency but lacks RTX's defense integration. Financial instability historically hampered R&D investment.
• Safran SA (SAF.PA): Safran's joint venture with GE (CFM) leads the narrowbody engine market, pressuring Pratt & Whitney. Strong in landing systems and cabin interiors (rivaling Collins), but limited defense exposure reduces U.S. contract access.
• Honeywell International (HON): Honeywell's aerospace unit competes with Collins in avionics and APUs, with superior margins but smaller scale. Its focus on business aviation and digital solutions (e.g., GoDirect) differentiates it, though lacks RTX's defense depth.