Why RTX Stock Is Down Today

Stock decline of RTX today explained

In a notable development, RTX, the conglomerate formed by the merger of Raytheon and United Technologies' commercial aerospace business, has reported a robust performance in the second quarter. The company's earnings per share stood at $1.56, surpassing expectations, and its revenue reached $21.6 billion, higher than the anticipated $20.6 billion.

RTX's defense business also saw a significant growth of 6%, while its Pratt & Whitney aircraft engine business experienced a remarkable 19% increase in sales. This strong performance can be attributed in part to increased demand for spare parts due to issues getting new planes to market.

Despite the downward adjustment in earnings per share guidance, which was not unexpected as RTX had previously warned of a potential $0.50 per share effect from tariffs, the company has made efforts to be more precise in its forecast, taking into account the impact of tariffs and tax estimates. RTX has adjusted its full-year earnings per share guidance to a range of $5.80 to $5.95.

RTX's revenue also increased by 9% year over year, with the growth being driven by strong double-digit growth on the commercial side. The company's Pratt & Whitney business, a significant part of RTX's operations, has a commercial-plane backlog reaching toward the end of the decade, indicating potential for future sales growth.

Despite the challenges posed by tariffs and taxes, RTX's strong position in the defense sector, operational excellence, consistent earnings, and robust contract backlog make it a favoured investment among analysts. As of mid-2025, RTX has received predominantly "Buy" ratings from analysts, with average 12-month price targets around $158 to $167, indicating modest upside potential of 1.5% to 7% from recent prices.

However, investors should not focus solely on the guidance revision when evaluating RTX stock. As of 12:30 ET, RTX's stock is under pressure and down 2% due to warnings about tariffs and taxes affecting future quarters. Despite this, RTX's strong defense portfolio, stable earnings, and strategic contracts make it a sound defensive growth stock in the current environment.

Key factors supporting RTX as a good investment include its strong contract wins and backlog, operational excellence and consistent earnings, dividend yield and income appeal, and resilience against macro headwinds. Potential risks include modest upside and valuation, market volatility and competition.

In conclusion, RTX's strong performance and strategic position make it a recommended buy for long-term investors looking for resilience with moderate upside.