RTX's Commercial Aftermarket Liftoff: Can It Overcome Tariff Gravity?

Core Insights - RTX Corporation's commercial aerospace aftermarket segment has been a significant performance driver due to increasing air traffic and demand for aftermarket parts and services [1][2][10] - The company achieved a 9% year-over-year organic sales increase in its last reported quarter, with commercial aftermarket sales growing by 21% in Q1 2025 [2][10] - Global air passenger traffic is projected to grow by 5.8% year-over-year in 2025, indicating continued stable growth for RTX's commercial aftermarket sales [3] Financial Performance - RTX's commercial aftermarket sales contributed to a solid overall performance, with a 21% increase in Q1 2025 [10] - The company revised its 2025 adjusted earnings per share forecast to a range of $5.80-$5.95 due to increased import tariffs on steel and aluminum [4][10] - RTX shares have increased by 30.6% over the past year, outperforming the industry growth of 14.7% [9] Market Outlook - The robust aftermarket activity is expected to provide RTX with a strong long-term buffer, despite potential industry headwinds from tariff impacts [5][10] - Other aerospace companies, such as Boeing and Lockheed Martin, may also face similar tariff-related cost pressures [6] Valuation - RTX is currently trading at a forward 12-month earnings multiple of 24.70X, which is lower than the industry average of 28.04X [11] Earnings Estimate Trends - The Zacks Consensus Estimate for RTX's near-term earnings has seen downward revisions over the past 60 days, indicating a trend of decreasing expectations [12][13]