Aerospace & Defense · NYSE
Current Price
$172.79
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on RTX Corporation with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Open DCF Calculator for RTXRTX Corporation, an aerospace and defense company, provides systems and services for the commercial, military, and government customers in the United States and internationally. It operates through three segments: Collins Aerospace, Pratt & Whitney, and Raytheon. The Collins Aerospace Systems segment offers aerospace and defense products, and aftermarket service solutions for civil and military aircraft manufacturers and commercial airlines, as well as regional, business, and general aviation, defense, and commercial space operations. This segment also designs, produces, and supports cabin interior, including oxygen systems, food and beverage preparation, storage and galley systems, and lavatory and wastewater management systems; battlespace, test and training range systems, crew escape systems, and simulation and training solutions; information management services; and aftermarket services that include spare parts, overhaul and repair, engineering and technical support, training and fleet management solutions, and asset and information management services. Its Pratt & Whitney segment supplies aircraft engines for commercial, military, business jet, and general aviation customers; and produces, sells, and services military and commercial auxiliary power units. The Raytheon segment provides defensive and offensive threat detection, tracking, and mitigation capabilities for U.S., foreign government, and commercial customers. The company was formerly known as Raytheon Technologies Corporation and changed its name to RTX Corporation in July 2023. RTX Corporation was incorporated in 1934 and is headquartered in Arlington, Virginia.
ROIC (TTM)
6.6%
ROE (TTM)
11.2%
FCF Yield
3.59%
Based on trailing twelve-month data, RTX shows a free cash flow per share of N/A and a ROIC of 6.6%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 3.59% are important context metrics when evaluating RTX's stock valuation relative to peers.
The intrinsic value of RTX depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether RTX is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $172.79. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on RTX Corporation: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Aerospace & Defense industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting RTX's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For RTX Corporation, this means projecting how much free cash flow the Aerospace & Defense will produce over the next 5-10 years, then discounting those amounts to today's dollars. RTX's ROIC of 6.6% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For RTX, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
