RTX (RTX) Raised Guidance On Record Backlog, Is The Stock Still Cheap?

RTX (RTX) just delivered a packed third quarter, combining double digit sales and earnings growth, a record US$340b backlog, and higher full year guidance that together sharpen investor focus on the stock.

RTX shares sit at US$191.01 after giving back some ground in recent months. The 90 day share price return is down 10.24%, while the 1 year total shareholder return is 8.51%. The 3 year total shareholder return is roughly 2.6x, and the 5 year total shareholder return is just under 2.4x.

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Bulls point to RTX’s record US$340b backlog and stronger guidance, while bears focus on the recent 10% pullback. As you evaluate the stock at this level, which side does the current valuation appear to support?

Most Popular Narrative: 16.5% Undervalued

RTX closed at $191.01 against a most followed fair value estimate of about $228.83, which frames the current pullback as a valuation gap rather than a complete reset of expectations.

RTX’s record backlog of US$289b, supported by a Raytheon rolling 12 month book to bill of 1.77 and US$19.9b of quarterly awards for systems such as Patriot, AMRAAM, AIM 9X and LTAMDS, points to multi year conversion of contracted demand into revenue and segment operating profit that some investors may not yet fully reflect in valuations.

See why 222 investors see RTX as 17% undervalued.

Result: Fair Value of $228.83 (UNDERVALUED)

Still, heavy reliance on government defense budgets and ongoing supply chain constraints could slow RTX backlog conversion and challenge the undervalued narrative if these issues intensify.

Find out about the key risks to this RTX narrative.

Next Steps

The mix of optimism and concern around RTX is clear. Move quickly, review the underlying data, and weigh both the 4 key rewards and 2 important warning signs.

Ready for more ideas beyond RTX?

If RTX has your attention, do not stop there. Broaden your watchlist with a few focused stock ideas built from hard numbers and clear filters.

• Spot potential bargains early by scanning companies that look mispriced on fundamentals through our 27 high quality undervalued stocks.
• Lock in income-focused opportunities by tracking businesses that appear in the 5 dividend fortresses.
• Prioritise resilience first by reviewing the list of solid balance sheet and fundamentals (25 results).

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