RTX's PhantomStrike Radar Catches Spotlight: Should You Buy the Stock Now?

Core Viewpoint - RTX Corp. has successfully completed the inaugural flight test of its PhantomStrike radar, showcasing its advanced capabilities in tracking airborne targets and terrain mapping, which may attract defense investors due to its affordability compared to traditional radars [1][2]. Company Performance - RTX's shares have increased by 12.8% year-to-date, outperforming the Zacks Aerospace-Defense industry's growth of 10.8% and the broader Aerospace sector's rise of 9.7%, while also surpassing the S&P 500's decline of 4.4% [4]. - The Collins Aerospace segment reported an 8% year-over-year revenue increase in Q1 2025, driven by a 13% rise in commercial aftermarket sales [6]. - The Pratt & Whitney unit experienced a 14% growth in Q1 sales, supported by a 28% surge in commercial aftermarket sales and a 3% increase in commercial OEM [7]. Market Outlook - The commercial aerospace market outlook remains positive, with the International Air Transport Association projecting a 3.8% average annual growth in global passenger traffic over the next 20 years, adding over 4.1 billion new passenger journeys by 2043 [8][10]. - Ongoing geopolitical tensions are expected to sustain strong demand for defense solutions, with RTX's defense backlog reported at $92 billion as of March 31, 2025 [11]. Earnings Estimates - The Zacks Consensus Estimate for RTX's second-quarter and full-year 2025 revenues suggests improvements of 4.9% and 4.2%, respectively, from the prior year [13]. - The earnings estimates for 2026 indicate an improvement of 5.8% and 11.9% from 2025 estimates [13]. Valuation - RTX's forward 12-month price-to-earnings (P/E) ratio is 20.73X, which is higher than its peer group's average of 18.64X, indicating a premium valuation [20].