Is RTX Corporation Stock Outperforming the S&P 500?

RTX Corporation (RTX), headquartered in Arlington, Virginia, provides systems and services for commercial, military, and government customers in the aerospace and defense industries. Valued at $232.2 billion by market cap, the company offers avionics systems, aviation systems, communications and navigation equipment, interior and exterior aircraft lighting, aircraft seating, environmental control systems, flight control systems, and engine components.

Companies worth $200 billion or more are generally described as “mega-cap stocks,” and RTX definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the aerospace & defense industry. RTX’s strength lies in its diversified portfolio, enabling it to leverage growth across sectors and invest in R&D. Its scale and brand equity in aerospace and defense drive innovation and secure government contracts.

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Despite its notable strength, RTX slipped 4.5% from its 52-week high of $181.31, achieved on Oct. 28. Over the past three months, RTX stock gained 8.5%, outperforming the S&P 500 Index’s ($SPX) 5.4% gains during the same time frame.

In the longer term, shares of RTX rose 49.7% on a YTD basis and climbed 43.6% over the past 52 weeks, considerably outperforming SPX’s YTD gains of 15.8% and 13.1% returns over the last year.

To confirm the bullish trend, RTX has been trading above its 50-day moving average since mid-January, with minor fluctuations. The stock has been trading above its 200-day moving average over the past year, with slight fluctuations.

RTX's growth is driven by a rise in defense sales, particularly Patriot systems, and higher sales at Pratt & Whitney, fueled by aerospace demand.

On Oct. 21, RTX shares closed up by 7.7% after reporting its Q3 results. Its adjusted EPS of $1.70 exceeded Wall Street expectations of $1.42. The company’s revenue was $22.5 billion, exceeding Wall Street's $21.5 billion forecast. RTX expects full-year adjusted EPS in the range of $6.10 to $6.20.

In the competitive arena of aerospace & defense, Northrop Grumman Corporation (NOC) has lagged behind the stock, showing resilience with a 20.8% gain on a YTD basis and a 16.1% uptick over the past 52 weeks.

Wall Street analysts are reasonably bullish on RTX’s prospects. The stock has a consensus “Moderate Buy” rating from the 21 analysts covering it, and the mean price target of $192.05 suggests a potential upside of 10.9% from current price levels.

On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

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