Should You Buy RTX Stock? A Month of Strong Gains Raises Key Questions

RTX Corporation has captured investor attention with an impressive 9.8% surge over the past month, meaningfully outpacing both its industry peers and broader market benchmarks. To put this in perspective, the Aerospace-Defense sector gained only 3.7%, while the S&P 500 climbed just 0.2% during the same window. Competitors like General Dynamics (up 5.9%) and Huntington Ingalls Industries (up 15%) also benefited from sector momentum, but RTX’s trajectory warrants deeper examination before making an investment decision.

Understanding RTX’s Valuation Position

From a pricing standpoint, RTX trades at a forward 12-month P/E of 27.95X—notably below the aerospace-defense industry average of 31.12X. This discount suggests the market is pricing in measured growth expectations. By comparison, General Dynamics commands a 20.66X multiple and Huntington Ingalls Industries sits at 21.19X, both appearing more attractive on pure valuation metrics. The question becomes whether RTX’s premium valuation reflects superior growth prospects or if competitors offer better value for capital allocation.

The Catalyst Driving Recent Momentum: Contract Wins

RTX’s recent stock appreciation appears anchored in tangible business wins. The company secured $438 million from the Federal Aviation Administration in January 2026 through its Collins Aerospace division for the Radar System Replacement program—a critical modernization initiative for U.S. air traffic control infrastructure.

The defense revenue stream tells an equally compelling story. RTX landed a $1.7 billion foreign military sales contract to supply Spain with four Patriot air and missile defense systems, including radars, command structures, and training support. Romania selected RTX for a $168 million Patriot system order, while the U.S. Air Force contracted RTX to equip the autonomous X-62A Variable In-flight Simulation Test Aircraft with PhantomStrike radar technology.

For defense contractors, sustained procurement from the Pentagon and allied nations validates product reliability and opens doors to recurring revenue streams—precisely what RTX has demonstrated.

Growth Expectations and Financial Trajectory

Consensus estimates project RTX’s 2026 revenues will expand 6.6% year-over-year, with earnings climbing 8.6% in the same period. However, a nuance worth monitoring: analyst estimates for 2026 earnings have drifted downward over the past 60 days, signaling some investor caution about the company’s profit-generation trajectory relative to initial expectations.

Balance Sheet Strength: Can RTX Meet Its Obligations?

RTX maintains a current ratio of 1.07, exceeding the minimum threshold of 1.0 needed to cover short-term liabilities with current assets. This indicates adequate working capital management, though investors should note the ratio sits on the conservative side rather than providing a significant buffer.

Macro Headwinds Worth Monitoring

Trade policy represents a material consideration. U.S. tariffs imposed in February 2025 triggered retaliatory measures from China, the European Union, and Canada. For multinational defense contractors like RTX with substantial international revenue exposure, prolonged trade friction could compress margins and complicate supply chain dynamics. This uncertainty shadows otherwise positive contract momentum.

Investment Perspective: Buy Now or Wait?

RTX presents a mixed picture. The discounted valuation relative to peers, combined with a visible pipeline of defense contracts, supports a thesis of steady earnings growth. However, macro trade uncertainties and recent downward revisions in profit estimates introduce tactical risk for near-term buyers.

Current shareholders may reasonably hold positions given the company’s contract momentum and reasonable valuation. New investors might benefit from awaiting greater geopolitical clarity before establishing positions. RTX carries a Zacks Rank #3 (Hold) rating, reflecting this balanced view—neither compelling as a must-buy nor positioned for immediate rejection.