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Is RTX (RTX) Cheap Following Its Pratt And Whitney A321XLR Engine Milestone?

Simply Wall St · 2d ago

RTX Corporation (RTX) is back in focus after a product milestone at Pratt & Whitney, where United Airlines took delivery of the first Airbus A321XLR powered by GTF Advantage engines.

RTX shares have eased recently, with a 1-day share price return of 1.65% lower and a 30-day share price return down 10.22%, even as the 1-year total shareholder return is 8.52% and the 3-year total shareholder return is about 7x.

Scan beyond RTX and explore other aerospace and defense stocks with strong fundamentals and resilient balance sheets in our hand picked list of solid balance sheet and fundamentals (25 results).

RTX now trades about 21% below one intrinsic value estimate and roughly 28% under the average analyst target after a pullback. Is that genuine mispricing, or is it a fair warning label on execution risk and capital intensity?

Most Popular Narrative: 23% Undervalued

RTX closed at $180.26, while the most followed narrative anchors fair value closer to $234.82, which puts recent share weakness in a very different light.

RTX’s record backlog of US$289b, supported by a Raytheon rolling 12 month book to bill of 1.77 and US$19.9b of quarterly awards for systems such as Patriot, AMRAAM, AIM 9X and LTAMDS, points to multi year conversion of contracted demand into revenue and segment operating profit that some investors may not yet fully reflect in valuations.

See why 211 investors see RTX as 23% undervalued.

Result: Fair Value of $234.82 (UNDERVALUED)

Still, RTX carries real execution risk if the planned US$10b to US$10.5b of 2026 investment underdelivers or if defense budgets shift away from its programs.

Find out about the key risks to this RTX narrative.

Next Steps

Mixed signals around RTX can be confusing, so take a moment to weigh both sides and move quickly to your own view with 5 key rewards and 3 important warning signs.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.