RTX Corporation ranks in an above-average position in its peer group, with a broadly solid profile across the main structural dimensions. Trend conditions have deteriorated, without yet reaching an extreme downside state.
Peer-relative scores, weakest to strongest
RTX Corporation is a major aerospace and defense company operating globally across commercial aviation and military segments. Its business spans aircraft engines, avionics, and defense systems, serving both government and commercial clients.
A premium valuation is difficult to defend when profitability metrics lag: RTX’s operating margin of 11% and ROIC of 8.7% indicate a subpar quality and margin profile, despite its scale. The market assigns RTX a forward P/E of 26.1x—above the peer median—yet the company’s ability to convert revenue into high-quality earnings remains limited. This tension between valuation and underlying quality keeps the premium not fully protected.
Internally, the quality score of just 32/100—well below the sector median—reinforces the structural concern: RTX’s valuation score is a weak 18/100, signaling that the market is already pricing in more than the business currently delivers. While the trend score is a robust 80/100, suggesting recent momentum, this has not translated into a sustained improvement in quality or profitability. Organic revenue growth of 14% YoY in Q4 2025 is a positive signal, but the persistent margin and quality gap remain the primary issues.
Recent external context complicates the picture rather than resolving it. On one hand, RTX’s strong organic revenue growth and a 9.74% increase for FY25 support the company’s scale and reinforce its position in a favorable sector backdrop, with global defense spending and commercial air recovery providing tailwinds. However, analyst price target downgrades in April 2026, despite ongoing hold or strong buy ratings, indicate skepticism about whether recent earnings gains justify the valuation premium. The external environment supports the execution story, but valuation stress remains unresolved.
Compared to peers, RTX’s quality and margin profile is weaker than many: companies like Thales and ACS combine higher quality scores with similar or even lower valuations. This gap is only partly idiosyncratic—RTX’s scale and exposure to defense are strengths, but the persistent margin and quality lag place it at the sharper end of sector concerns.
A more defensible premium would require operating margins expanding to at least the peer median and ROIC moving toward the sector’s top quartile. Supporting improvement would include evidence that recent growth is translating into sustained quality gains. Until then, RTX carries a valuation not yet fully anchored.
Break down RTX's position across all dimensions with the full interactive tool.
This analysis is rule-based and descriptive. Peer-relative scores are derived from functional peer group comparisons using publicly available financial data. Scores reflect structural positioning only and do not constitute investment advice, a buy or sell recommendation, or a forecast of future performance. AssetNext peer scores are recalculated periodically as new data becomes available.
AssetNext scores reflect each company's structural position within its functional peer group — not a ranking against all stocks simultaneously. Peers are identified by similarity across eight financial dimensions, including revenue growth trajectory, margin structure, capital intensity, and earnings stability. A score of 75 means the company ranks in the top quartile within its own peer group, not the entire market.
Four dimension scores drive the overall peer score: Growth (revenue trajectory and expansion dynamics), Quality (margin structure and capital efficiency), Valuation (peer-relative pricing on standard multiples), and Stability (earnings consistency and financial predictability). Each dimension is scored 0–100 relative to the peer group, then combined into an overall peer score using equal weighting.
Because scores are peer-relative, the same company can have slightly different scores in different index universes. On comparison pages, both companies are shown within their shared peer universe wherever possible — so the scores are directly comparable. The peer basis is stated on each score card.
Scores are recalculated periodically as underlying financial data is updated. All analysis is descriptive and rule-based — AssetNext describes structural realities and never issues buy, sell or hold recommendations.