RTX · RTX

The thesis

RTX Corporation's shares are modestly more likely than not to beat the S&P 500 over the next three months. The record $340 billion backlog and the 2026 guidance raised on 20 October 2026 outweigh a federal defense budget now expected to slip into 2027. The case turns on two dated events: the expiry of federal stopgap funding on 11 December 2026, and the first 2027 guidance at the fourth-quarter report, estimated for late January 2027.

The shares closed at $201.29 on 11 November 2026, up from a post-election low close of $189.53 on 6 November 2026. They now sit above both the 50-day moving average of $192.92 and the 200-day moving average of $194.5 in adjusted daily closes. They are still down 8.4% over three months.

Market pricing at $201.29 on 11 November 2026 still discounts the budget delay. That close is 11.3% below the 52-week high of $226.88, set on 10 August 2026, before the 20 October 2026 guidance raise. Chief financial officer (CFO) Neil Mitchill spoke at the Baird Global Industrial Conference on 10 November 2026. News coverage through 11 November 2026 reported no change to guidance from that appearance, and the shares closed higher that day at $200.27.

Bullish and bearish views on RTX Corporation

The bull case on RTX Corporation (RTX), in brief: earnings beat by a wide margin. The bear case: full-year funding is slipping into 2027.

Bull case

• Earnings beat by a wide margin. Third-quarter adjusted earnings per share (EPS) were $2.26, against a $1.78 consensus per Benzinga and $1.70 a year earlier, per the company's 20 October 2026 results release. Sales were $25.0 billion, up 11%, with organic growth of 12%.
• Guidance rose on every line. On 20 October 2026, RTX raised 2026 adjusted sales guidance to $97.0–$97.5 billion, adjusted EPS guidance to $7.65–$7.75 and free cash flow guidance to $9.0–$9.2 billion, according to its results release.
• Munitions contracts point to higher output. Management said about $70 billion of multi-year munitions contracts could support a two- to four-fold rise in production rates, with the revenue growing in 2027 and faster after that, per Zacks' call summary on 21 October 2026. The Machine Maker reported a $22.9 billion Navy Tomahawk contract on 19 August 2026. On 11 November 2026, company news said Raytheon had partnered with two Martinrea International units to speed up Tomahawk cruise missile production.
• Management expects growth in 2027. On the 20 October 2026 call, Mitchill said he expects growth in revenue and earnings, wider margins and strong cash generation in 2027, per Zacks. Management also expects shop visits for the geared turbofan (GTF) engine to grow at a low-double-digit rate in 2027.
• Interceptors stay a priority. Capital Alpha's Byron Callan said missile-defense interceptor replenishment will stay a priority even if total defense spending shrinks, per Breaking Defense on 5 November 2026. Raytheon builds the SM-3 and SM-6 interceptors and the AMRAAM missile.
• Commercial work sits outside the budget fight. Commercial backlog was $176 billion on 30 September 2026, and Pratt & Whitney's commercial aftermarket sales rose 21% in the third quarter, according to the results release.
• Analyst targets sit above the price. MarketBeat put the consensus target at $231.24, with a "Moderate Buy" rating, on 9 November 2026.

Bear case

• Full-year funding is slipping into 2027. Air & Space Forces Magazine reported on 9 November 2026 that a shutdown looks unlikely after the 11 December 2026 deadline, but so do full-year 2027 appropriations, and another stopgap into January will probably be needed. The current continuing resolution, signed on 2 September 2026, bars the Pentagon from starting new production or raising output above fiscal 2026 levels, per GovConWire.
• Odds of extra money have collapsed. Callan put the chance of a Republican reconciliation bill at 10% and wrote that "nothing will get done by Congress for defense legislation" in November or December, per Air & Space Forces on 9 November 2026. The administration seeks $350 billion through reconciliation, and the Center for Strategic and International Studies (CSIS) expects about $60 billion, per Benzinga on 2 November 2026.
• The new Congress wants a smaller budget. Democrats take strong majorities in both chambers on 3 January 2027. Rep. Adam Smith, the top Democrat on the House Armed Services Committee, warned against a defense budget above $1 trillion, per Air & Space Forces on 9 November 2026.
• Tariff recovery flatters 2026. The 2026 adjusted EPS guidance includes about $0.25 of recovered tariff costs under the International Emergency Economic Powers Act (IEEPA), according to the results release. Mitchill said the end of those recoveries will weigh on profit from one quarter to the next, per Zacks on 21 October 2026.
• Cash flow fell in the third quarter. Third-quarter free cash flow was $2.1 billion, against $4.0 billion a year earlier, according to the results release.
• Executives have sold near $200. Chief human resources officer Dantaya Williams exercised options and sold 9,071 shares on the open market at $201.70 on 30 October 2026, according to a Form 4 filed on 3 November 2026. General counsel Ramsaran Maharajh sold 13,655 shares at $223.92 on 18 August 2026, according to a Form 4 filed on 19 August 2026.

Price setup

The shares closed at $201.29 on 11 November 2026. That is above the 50-day moving average of $192.92 and the 200-day moving average of $194.5, both as of 11 November 2026 in adjusted daily closes. The 3-month change is −8.4%.

The midterm sell-off is the most recent price range. The shares closed at $198.43 on 4 November 2026 and fell to $189.53 on 6 November 2026. They then recovered to $196.31 on 9 November 2026, $200.27 on 10 November 2026 and $201.29 on 11 November 2026. A close back below $189.53 would undo that recovery. A close back under both moving averages would show the budget discount widening again.

The 52-week high is $226.88, set on 10 August 2026, and the 52-week closing low is $168.02, set on 1 December 2025. Recovering the August high would take a change in the budget outlook. Earnings already beat in October without lifting the shares back to that level.

Catalysts ahead

• 20 November 2026: Ex-dividend date for the $0.73 quarterly dividend declared on 29 October 2026. Holders of record after this date do not receive the quarterly payment. Adjusted price history reflects the dividend from this date.
• 11 December 2026: Expiry of the continuing resolution funding the federal government. A full-year bill, another stopgap or a shutdown decides whether the AMRAAM, SM-6, SM-3 and Tomahawk multi-year contracts can be funded at higher production rates.
• 3 January 2027: New Congress with Democratic majorities in both chambers is sworn in. Sets who writes the fiscal 2027 defense budget if the lame-duck session does not pass one, and how far the topline falls below the $1.15 trillion request.
• ~27 January 2027 (est.): Q4 2026 report and first 2027 guidance. Shows whether earnings keep growing once the IEEPA recovery drops out, and how management frames defense demand under the new Congress.

What would change the view

A daily close below $170, near the 52-week closing low of $168.02 set on 1 December 2025, which would show the market discounting the raised 2026 guidance. A cut to the $7.65–$7.75 full-year adjusted EPS guidance would also break the case.

The risks this note tracks, each with what would confirm it:

• Congress extends the continuing resolution into 2027, which keeps munitions contracts unfunded and production rates frozen. Confirmed by: another stopgap past 11 December 2026, for example to March 2027, with no full-year appropriations for the AMRAAM, SM-6 and SM-3 contracts.
• A government shutdown after 11 December 2026 delays contract actions and payments across the defense business. Confirmed by: federal funding lapses after the 11 December 2026 deadline. Capital Alpha put the odds at 50% on 5 November 2026; Air & Space Forces called a shutdown unlikely on 9 November 2026.
• The new Congress cuts the fiscal 2027 defense budget below the $1.15 trillion base request. Confirmed by: a final defense bill near or below $1 trillion, the ceiling Rep. Adam Smith favors, or less munitions procurement than in the House committee's bill.
• Earnings growth slows once the IEEPA cost recovery stops lifting comparisons. Confirmed by: 2027 adjusted EPS guidance at the Q4 report that implies little or no growth over the $7.65–$7.75 range for 2026.
• Fourth-quarter cash generation falls short after Q3 free cash flow halved year over year. Confirmed by: management lowering the $9.0–$9.2B free cash flow guidance at or before the Q4 report.
• Collins Aerospace margins ease in the fourth quarter on higher research and digital spending. Confirmed by: a Q4 Collins operating margin well below the 21.3% reported for Q3, which included about 300 basis points of IEEPA recovery.
• Pratt & Whitney engine shortfalls keep pacing Airbus output and lead to compensation costs. Confirmed by: Airbus quantifying lower 2027 engine deliveries, or Pratt & Whitney disclosing a compensation charge.
• A US–Iran agreement removes the geopolitical premium and slows munitions replenishment. Confirmed by: a signed agreement followed by smaller or delayed orders for interceptors and missiles.

What it trades with

RTX trades with the other defense prime contractors on budget news. Northrop Grumman, Lockheed Martin and General Dynamics all fell with RTX on 4 November 2026 after the midterm result, per Benzinga. Lockheed rose 26% in October on a record backlog, per Benzinga on 31 October 2026.

Collins Aerospace and Pratt & Whitney make up the commercial side, which follows air traffic, aftermarket demand and Airbus build rates rather than the Pentagon budget. Commercial backlog was $176 billion and defense backlog $164 billion on 30 September 2026, so news about the budget moves only part of the business. Benzinga put RTX's market value at $264.91 billion on 10 November 2026.