RTX Price Target Raised to $177, Analyst Cites Operational Strength

RTX stock price (NYSE:RTX) is back above $150 today, as bulls are boosted by a price target upgrade from UBS. The firm increased its target to $177 from $166, maintaining a Buy rating on the aerospace and defense giant.

UBS's bullish outlook is predicated on RTX's “steady operational improvement” coupled with an “attractive valuation.” This suggests the firm believes RTX's current market price doesn't fully reflect its underlying performance and future potential.

RTX recently reported Q2 2025 results, showcasing a 9% year-over-year revenue increase to $21.6 billion and an 11% jump in adjusted EPS to $1.56. The company's robust backlog, totaling $236 billion ($144 billion commercial, $92 billion defense), provides significant revenue visibility.

The company's strong performance led to raised full-year 2025 guidance, further fueling investor optimism. This positive momentum is corroborated by other analyst upgrades, including Morgan Stanley, which recently increased its price target to $165 from $135, citing resilience in the sector.

“RTX is strategically positioned at the intersection of commercial and defense sectors, which offers a balanced growth opportunity,” stated Gavin Parsons, UBS analyst, in a research note. He further highlighted that international defense demand, which constitutes 44% of Raytheon's backlog, is a key driver.

The stock's YTD gain of 29.5% underscores the relative outperformance, and bullish sentiment. This is further supported by consistent dividend payouts and capital return programs.

Bull Case for RTX:

• Strong operational performance and attractive valuation (UBS).
• Robust backlog provides revenue visibility.
• Positive analyst sentiment and price target upgrades.
• Bullish technical indicators.
• Exposure to both commercial and defense sectors.

Bear Case for RTX:

• Potential risks associated with global economic slowdown.
• Dependence on government contracts and political uncertainties.
• Geopolitical tensions affecting defense spending.
• Supply chain disruptions impacting production.
• Increased competition in the aerospace and defense sectors.

While RTX has demonstrated strong operational performance, its valuation, even after recent pullbacks, may still be pricing in overly optimistic growth expectations. The defense sector, while generally stable, is susceptible to shifts in geopolitical priorities and budget constraints. Furthermore, reliance on large government contracts introduces inherent risks related to project execution and potential cost overruns.

RTX's leadership is confident in the company's long-term prospects. As CEO Greg Hayes stated in a recent earnings call, “Our strong backlog and disciplined execution will drive sustainable growth and value creation for our shareholders.”