RTX Stock In Limelight After Multiple Price Target Hikes: But Retail Enthusiasm Ebbs

Shares of aerospace and defense conglomerate RTX ($RTX) were in focus on Wednesday after multiple brokerages raised their price targets on the stock following the firm's earnings release.

Morgan Stanley analyst Kristine Liwag reportedly raised its price target on RTX to $130 from $120, while keeping an ‘Equal Weight’ rating, according to The Fly.

While the brokerage acknowledged that performance is moving in the right direction for the Raytheon and Pratt & Whitney businesses, it noted that Collins' margin is impacted by narrow-body volume due to the Boeing ($BA) strike and supply chain constraints. The firm said it continues to see the risk reward as "balanced at current levels."

Meanwhile, RBC Capital increased its price target on RTX to $130 from $115, while keeping a ‘Sector Perform’ rating on the shares. The analyst noted that RTX called out $36 billion in new awards and slightly raised its 2024 sales and earnings guidance.

On Tuesday, RTX reported that its Q3 adjusted sales rose 6% year-over-year (YoY) to $20.1 billion. This compares with a Wall Street estimate of $19.84 billion. Earnings per share (EPS) came in at $1.45 versus an estimate of $1.34.

The firm also raised its 2024 outlook with adjusted sales expected to come in at $79.25 - $79.75 billion, up from an earlier forecast of $78.75 - $79.5 billion. Adjusted EPS is estimated at $5.50 - $5.58, up from $5.35 - $5.45.

CEO Chris Calio said demand across the company’s portfolio, particularly within commercial aftermarket and defense, remains robust.

From a segmental basis, Collins Aerospace reported sales of $7.08 billion, up 7% versus the prior year. The firm attributed the increase in sales to a 14% rise in defense and a 9% increase in commercial aftermarket. At the same time, Pratt & Whitney’s sales came in at $7.24 billion while Raytheon reported sales of $6.39 billion.

Despite the positive earnings, retail sentiment dipped into the ‘neutral’ territory’ (52/100) from ‘extremely bullish’ a day ago.

One Stocktwits user, however, expects the shares to hit the $140 mark.

Shares of RTX have gained over 48% since the beginning of the year.

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