Jefferies Raises RTX Corporation Price Target to $225 After Q4 Beat and Dual $397M Contracts
Jefferies raised RTX’s price target from $210 to $225, implying 12.8% upside, while JPMorgan and Susquehanna lifted targets up to $230. RTX reported Q4 EPS of $1.55 on $24.24 billion revenue, and won $200 million LTAMDS and $197 million MS-110 defense contracts.
1. Analyst Price Target Increase
On January 28, Jefferies analyst Sheila Kahyaoglu raised her price target for RTX Corporation to $225, representing a projected upside of 12.8% from recent trading levels. This adjustment follows a comprehensive review of RTX’s order backlog, margin profile and cash flow trajectory, and reflects confidence in the company’s ability to sustain operational leverage across its Pratt & Whitney, Collins Aerospace and Raytheon divisions. Jefferies cited improved defense spending forecasts and a stronger aftermarket services pipeline as key drivers behind the revised target.
2. Major Contract with TTM Technologies
RTX’s Raytheon business secured a multi-year agreement with TTM Technologies valued at up to $200 million for the design, manufacture and testing of critical components used in the Lower Tier Air and Missile Defense Sensor (LTAMDS). Under the contract, TTM will support accelerated delivery schedules and cost-reduction initiatives, ensuring program milestones for LTAMDS are met on time. According to Mike Mills, Raytheon’s Vice President, this collaboration enhances supply-chain resilience and underpins the company’s long-term defense sensor roadmap.
3. Strong Fourth-Quarter 2025 Financial Results
RTX reported fourth-quarter sales of $24.23 billion, up 12% year-over-year, driven by robust contributions from Pratt & Whitney engines and Collins Aerospace avionics systems. Adjusted EPS rose to $1.55, beating consensus estimates of $1.47 by $0.08, while net margin improved to 7.6% and return on equity reached 13.1%. Free cash flow for the quarter totaled $1.8 billion, supporting a 10% year-over-year increase in shareholder distributions through dividends and share repurchases.
4. Strategic Guidance and Outlook for 2026
For fiscal 2026, RTX provided full-year guidance of $92 billion to $93 billion in sales, with organic growth expected between 5% and 6%. Adjusted EPS is forecast at $6.60 to $6.80, reflecting ongoing margin expansion in Pratt & Whitney aftermarket services and higher defense program volumes. Management highlighted a diversified backlog of $185 billion as of year-end, offering strong revenue visibility across commercial aerospace, defense systems and space segments.