RTX Outperforms Industry Over the Past 3 Months: What Should You Do?

Core Insights - RTX Corporation (RTX) shares have increased by 15.1% over the past three months, outperforming the Zacks Aerospace-Defense industry's growth of 3.7% and the broader Zacks Aerospace sector's gain of 3% [1][8] - Other industry players like Huntington Ingalls Industries (HII) and General Dynamics (GD) have also shown strong performance, with HII shares rising by 18.9% and GD by 11.3% in the same period [3] - RTX's recent gains are attributed to strong quarterly results, strategic collaborations, and notable contract wins, contributing to investor optimism [5][8] Financial Performance - RTX reported a solid revenue growth of 11.9% in its third-quarter 2025 results, with a bottom line improvement of 17.2% compared to the same quarter last year [5] - The Zacks Consensus Estimate for RTX's 2025 sales indicates a year-over-year growth of 7.8%, while the estimate for 2026 sales suggests an improvement of 6.4% [10] - The consensus estimate for RTX's earnings in 2025 and 2026 implies year-over-year growth of 7.9% and 9%, respectively [10] Strategic Developments - In November 2025, RTX signed a Memorandum of Understanding to assist Avio in establishing a solid rocket motor facility in the U.S., enhancing its vertical integration [6] - RTX's Raytheon business secured a contract to support the UK's Space Domain Awareness mission, utilizing NORSSTrack software for satellite tracking and debris monitoring [7] - The company delivered its first PhantomStrike radar to Korea Aerospace Industries for the FA-50 Light Combat Aircraft fleet in October [7] Valuation Metrics - RTX's forward 12-month price-to-earnings (P/E) ratio stands at 26.91X, which is below the industry average of 28.93X, indicating a potentially attractive valuation [14] - Comparatively, HII and GD have lower forward P/E ratios of 19.02X and 20.62X, respectively [15] Market Outlook - The steady flow of contract wins from the Pentagon and U.S. allies for RTX's defense products serves as a significant growth catalyst [9] - Recent upward revisions in RTX's earnings estimates over the past 60 days reflect increasing investor confidence in the company's earnings generation capabilities [12]