RTX Corporation (RTX) Stock Valuation — PE Analysis
Aerospace & Defense · NYSE
Current Price
$209.91
PE Ratio (TTM)
36.5x
Intrinsic Value
$247.34
+15.1% margin of safety
COMPETITIVE MOAT
↑Dominant Defense Supplier
RTX is a critical supplier of advanced aerospace and defense systems, including engines and avionics. This position is reinforced by long-term government contracts and high switching costs for military platforms.
↑Technological Expertise & R&D
Significant investment in research and development creates proprietary technologies and advanced capabilities. This leads to a strong pipeline of next-generation defense solutions and a competitive edge.
↑Extensive Installed Base
A vast installed base of engines and systems across commercial and military aircraft creates recurring revenue streams. This also fosters deep customer relationships and opportunities for upgrades and maintenance services.
INVESTMENT RISKS
↓Government Contract Volatility
Defense spending is subject to political shifts and budget constraints. Changes in government priorities or program cancellations can significantly impact RTX's order book and revenue.
↓Intense Competition
While RTX holds strong positions, it faces competition from other major defense contractors and emerging players. Innovation and cost management are crucial to maintaining market share.
↓Regulatory and Compliance Hurdles
The aerospace and defense industry is heavily regulated. RTX must navigate complex compliance requirements, export controls, and evolving security standards.
Base case
RTX base case PE valuation
A base case PE valuation for RTX estimates a fair value of about $247.34 per share, against a current price of $209.91. The model assumes 10.8% annual earnings growth, a 36.57x target PE multiple, and a 10% discount rate.
Intrinsic Value
$247.34
Margin of safety
+15.1%
Expected annual return
+3.3%
Base case assumptions: 10.8% annual earnings growth, 36.57x target PE, 10% discount rate, 5 year projection. Data as of 2026-08-21.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the RTX PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for RTX Corporation respond.
Open PE Calculator for RTXCompany Overview
RTX Corporation, a major player in the aerospace and defense sectors, provides sophisticated systems and extensive services to a diverse global clientele. This includes commercial entities, military organizations, and government agencies, both within the United States and internationally. The company's operations are divided into three primary business units: Collins Aerospace, Pratt & Whitney, and Raytheon. The Collins Aerospace segment delivers a broad range of aerospace and defense products, alongside comprehensive aftermarket support solutions. Its customer base spans manufacturers of civil and military aircraft, commercial airlines, and operators in regional, business, general aviation, defense, and commercial space ventures. This division's offerings cover the design, production, and maintenance of aircraft interior components, such as oxygen systems, food and beverage preparation and storage facilities, galley systems, and lavatory and wastewater management. It also supplies battlespace management tools, test and training range infrastructure, crew escape mechanisms, simulation and training programs, and essential information management services. Its post-sales services include providing spare parts, overhaul and repair, specialized engineering and technical assistance, training and fleet management, and integrated asset and information management. Pratt & Whitney, another core segment, is a leading provider of aircraft propulsion systems for commercial airliners, military aircraft, business jets, and general aviation. This division is also responsible for manufacturing, selling, and maintaining auxiliary power units for both military and commercial applications. Finally, the Raytheon segment specializes in creating advanced capabilities for the detection, tracking, and mitigation of both defensive and offensive threats. Its tailored solutions serve the U.S. government, foreign governments, and various commercial customers. Established in 1934, the company was formerly known as Raytheon Technologies Corporation before officially rebranding as RTX Corporation in July 2023. RTX Corporation maintains its corporate headquarters in Arlington, Virginia.
Financial Metrics — RTX PE Stock Valuation Data
PE Ratio (TTM)
36.5x
PEG Ratio
1.46
Earnings Yield
2.73%
ROE (TTM)
11.8%
Revenue/Share (TTM)
$69.30
Dividend Yield
1.34%
Debt/Equity
0.59x
Frequently Asked Questions
What is the PE ratio of RTX?
The trailing twelve-month PE ratio of RTX reflects how much investors pay per dollar of RTX Corporation's earnings. This metric is most useful when compared to Aerospace & Defense peers and the company's own historical range.
Is RTX overvalued based on PE ratio?
RTX's PE of 36.5x combined with a PEG ratio of 1.46 provides a growth-adjusted perspective. A PEG near 1.0 means the P/E is roughly in line with the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Aerospace & Defense, a DCF analysis may be more appropriate.
How do I value RTX stock using PE ratio?
To value RTX Corporation using PE: (1) Compare the current PE (36.5x) against the Aerospace & Defense median to assess relative pricing, (2) check the PEG ratio (1.46) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of RTX?
RTX's PEG ratio is 1.46, calculated by dividing the PE ratio (36.5x) by the expected earnings growth rate. A PEG near 1.0 means the P/E is roughly in line with the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for RTX stock valuation?
PE ratio gives a quick relative read — how RTX is priced versus Aerospace & Defense peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See RTX DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Industrials valuationsP/E and DCF value RTX with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-08-21. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.