RTX Corp. Price Target Raised to $242 on $6B Munitions Replenishment
Melius Research upgraded RTX Corp. to buy and raised its price target to $242, citing Operation Epic Fury-driven procurement tailwinds. The firm forecasts high-single-digit defense sales growth through 2028—potentially exceeding 10% annually without supply constraints—and estimates a $6 billion munitions replenishment cost.
1. Melius Upgrades Rating and Price Target
Melius Research upgraded RTX Corp. to buy from hold and lifted its price target to $242, citing increased defense procurement driven by Operation Epic Fury. The upgrade reflects an expected sustained wave of military spending benefiting missiles, munitions and shipbuilding programs.
2. Strong Defense Sales Forecast
The firm forecasts high-single-digit core sales growth for RTX’s defense end market through 2028, well above consensus projections, and noted that absent supply chain constraints annual growth could exceed 10%. This outlook underpins expectations for multi-year production framework expansions.
3. $6B Munitions Replenishment Estimate
Replacing munitions expended during the first 16 days of Operation Epic Fury is estimated to cost roughly $6 billion, offering significant upside as inventories are replenished beyond pre-conflict levels. Approximately 18% of RTX’s total sales are tied to missiles and missile defense.
4. Balanced Defense and Commercial Aerospace Mix
RTX maintains a 52% defense and 48% commercial aerospace revenue split, with heavy F-35 utilization in ongoing conflicts expected to boost maintenance and spare parts demand at Collins Aerospace and Pratt & Whitney.