Should You Buy, Hold or Sell RTX Stock Ahead of Q4 Earnings?

Core Viewpoint - RTX Corporation is expected to report fourth-quarter 2025 results on January 27, 2026, with projected revenues of $22.74 billion, reflecting a 5.2% increase year-over-year, while earnings per share (EPS) is estimated at $1.45, indicating a 5.8% decline from the previous year [1][5]. Revenue Estimates - The Zacks Consensus Estimate for Q4 2025 revenues is $22.74 billion, with a year-over-year growth estimate of 5.18% [2]. - The high estimate for Q4 2025 revenues is $22.92 billion, while the low estimate is $22.53 billion [2]. - For the full year 2025, revenues are estimated at $87.07 billion, with a year-over-year growth of 7.84% [2]. Earnings Estimates - The Zacks Consensus Estimate for Q4 2025 EPS is $1.45, reflecting a year-over-year decline of 5.84% [3]. - The high estimate for Q4 2025 EPS is $1.50, and the low estimate is $1.41 [3]. - For the full year 2025, EPS is estimated at $6.19, with a year-over-year growth of 8.03% [3]. Performance Insights - RTX has consistently beaten the Zacks Consensus Estimate in the past four quarters, with an average surprise of 12.15% [3][4]. - The company is experiencing strong demand for commercial aftermarket services and jet engines, which is expected to support revenue growth in the Pratt & Whitney segment [5][10]. Market Dynamics - Rising flight hours and increasing air passenger traffic are driving demand for commercial aircraft aftermarket services and jet engines, benefiting RTX's sales [8][9]. - Strong sales of military engines for key programs, including the F-35, are likely to enhance the performance of the Pratt & Whitney segment [10]. Cost Considerations - Higher tariff-related costs may negatively impact earnings despite increased sales volume and operational performance across RTX's segments [12]. - The company is implementing measures to mitigate tariff impacts, which may help reduce cost pressures [13]. Stock Performance - RTX shares have increased by 57.9% over the past year, outperforming the Zacks aerospace-defense industry growth of 30.4% [14]. - The forward 12-month price-to-sales (P/S) ratio for RTX is 2.82X, higher than the industry average of 2.77X, indicating a premium valuation [16]. Investment Outlook - RTX is well-positioned for long-term growth in commercial aerospace and defense markets, supported by a healthy order backlog and strong free cash flow generation [18]. - Near-term challenges include supply-chain constraints and tariff-related cost pressures, which could affect margins and revenue realization [19][22].