RTX Corporation Maintains $230 Target on Strong Defense Demand
RTX Corp delivered robust Q1 2026 growth across Pratt & Whitney and Collins Aerospace, with defense munitions and sensor demand outpacing supply as global conflicts spur replenishment. Bank of America maintained a Buy rating and $230 price target on an 18x 2027 EV/EBITDA multiple, noting commercial aviation concerns offset by the upcoming GTF Advantage engine.
1. Q1 Performance
RTX posted broad-based growth across defense and commercial aerospace units in the first quarter of 2026, with Pratt & Whitney and Collins Aerospace seeing solid original equipment and aftermarket demand. Rising global conflicts drove munitions and sensor order replenishments, strengthening its defense backlog.
2. Investor Concerns
After the earnings release, shares dipped as investors weighed potential softness in commercial aerospace demand despite underlying momentum in engine services and parts sales.
3. Bank of America Analysis
Bank of America reiterated a Buy rating and set a $230 price objective based on an 18x multiple of 2027 estimated EV/EBITDA, down from its prior 21x multiple, citing resilient defense demand and unmoved aerospace fundamentals.
4. Growth Catalysts
Near-term uplift is expected from U.S. fiscal 2027 defense budget allocations and a February munitions framework agreement, while the GTF Advantage engine program, scheduled to enter service in late 2026, offers additional upside in the commercial aftermarket.