RTX Fair Value Estimate
$170.0613.3% overvalued
Blended fair value estimate based on DCF, Graham Number, and earnings-based models.
RTX Corp
Exchange: NYSESector: IndustrialsIndustry: Aerospace & Defense
Raytheon Technologies is an aerospace and defense company that provides advanced systems and services for commercial, military and government customers worldwide. With four industry-leading businesses ― Collins Aerospace Systems, Pratt & Whitney, Raytheon Intelligence & Space and Raytheon Missiles & Defense ― the company delivers solutions that push the boundaries in avionics, cybersecurity, directed energy, electric propulsion, hypersonics, and quantum physics. The company, formed in 2020 through the combination of Raytheon Company and the United Technologies Corporation aerospace businesses, is headquartered in Waltham, Massachusetts.
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Net income compounded at 3.3% annually over 6 years.
Current Price
$196.21
+0.77%GoodMoat Value
$170.06
13.3% overvaluedProfile
Valuation (TTM)
Market Cap$263.07B
P/E39.08
EV$293.28B
P/B4.03
Shares Out1.34B
P/Sales2.97
Revenue$88.60B
EV/EBITDA20.32
RTX Corp (RTX) Valuation
GoodMoat Analysis
RTX Corp appears unfavourable from a value investing perspective. The current price of $195 is above the GoodMoat Target of $170.06, offering a negative margin of safety, and the P/E of 38.8x is significantly higher than typical value thresholds.
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Based on the GoodMoat Investment Framework, RTX Corp's valuation is a primary concern. The current stock price of $195 sits above the platform's fair value estimate (GoodMoat Target) of $170.06. This results in a negative margin of safety of approximately -14.7%, which falls into the 'Unfavourable' band as defined in Section 4, where a margin of safety of at least 20% is considered favourable. The forward P/E ratio of 38.8x is exceptionally high for a value investor, especially for a company with 12.1% revenue growth and a 7.6% profit margin. This multiple suggests the market is pricing in significant future perfection, leaving little room for error. While the free cash flow yield of 3.0% and debt levels are not alarming, the core valuation metrics do not align with a value-oriented margin of safety. The stock's quality, as indicated by metrics like ROE of 10.3%, does not justify such a premium multiple, making the current price appear expensive relative to its fundamentals. Analysis based on data as of 2024-05-15.
RTX Valuation Metrics
FCF$7.94B
FCF Growth Rate2.09%
EPS Growth (CAGR)2.09%
WACC10.00%
Fair Value Models
Graham Number, PEG-based, and Earnings-based models
View Fair Value →RTX Valuation & Fair Value Analysis
RTX Corp (RTX) valuation analysis using multiple fair value methodologies. GoodMoat calculates a blended fair value target using discounted cash flow (DCF) analysis, the Graham Number, and earnings-based valuation models.
The GoodMoat Fair Value target for RTX Corp is $170.06. The current stock price is $196.21, suggesting the stock is 15.4% overvalued.
The price-to-earnings (P/E) ratio is 39.08. Price-to-book ratio is 4.03. Price-to-sales ratio is 2.97. Enterprise value to EBITDA is 20.32. PEG ratio is 4.34.
GoodMoat's valuation models include the Graham Number (based on EPS and book value), an earnings-based model (discounted future EPS), and a PEG-adjusted valuation. The three models are averaged to produce a blended fair value estimate. Use these tools alongside the DCF calculator and reverse DCF to form a comprehensive view of RTX Corp's intrinsic value.