RTX Corporation (RTX) Stock Valuation — DCF Analysis
Aerospace & Defense · NYSE
Current Price
$183.53
Intrinsic Value
$213.94
+14.2% margin of safety
COMPETITIVE MOAT
↑Defense Sector Dominance
RTX holds a significant position in the defense sector, benefiting from long-term government contracts and high barriers to entry for competitors. This provides a stable revenue stream and deep customer relationships.
↑Pratt & Whitney Engine Expertise
Pratt & Whitney's advanced engine technology and established service network create a strong competitive advantage. The complexity and safety requirements of aerospace engines make switching suppliers difficult and costly.
↑Integrated Aerospace Solutions
RTX offers a broad portfolio of aerospace and defense products, from engines to avionics and landing gear. This integrated approach allows for synergistic development and a comprehensive offering to customers.
INVESTMENT RISKS
↓Engine Reliability Concerns
Recent issues with Pratt & Whitney engines, as highlighted by ITA Airways' potential lawsuit, could damage RTX's reputation and lead to costly repairs or replacements. This impacts customer trust and future sales.
↓Supply Chain Dependencies
While Western rare earth supply chains are developing, RTX's reliance on specific materials and components could still pose risks. Geopolitical shifts or disruptions could impact production and costs.
↓Analyst Sentiment Volatility
Stock performance can be influenced by analyst recommendations, as seen with the Jefferies upgrade. Negative sentiment or downgrades could lead to significant stock price fluctuations.
Base case
RTX base case valuation
A base case discounted cash flow model for RTX estimates an intrinsic value of about $213.94 per share, against a current price of $183.53. The model assumes 9.6% annual free cash flow growth, a 10.0% discount rate, and a 30x exit multiple.
Intrinsic Value
$213.94
Margin of safety
+14.2%
Expected annual return
+3.1%
Base case assumptions: 9.6% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the RTX valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for RTX Corporation respond.
Open DCF 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 Stock Valuation Data
Revenue/Share (TTM)
$67.04
FCF/Share (TTM)
$6.20
ROIC (TTM)
6.9%
ROE (TTM)
11.2%
P/FCF
29.6x
EV/EBITDA
18.1x
FCF Yield
3.38%
Debt/Equity
0.59x
Based on trailing twelve-month data, RTX shows a free cash flow per share of $6.20 and a ROIC of 6.9%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 29.6x and FCF yield of 3.38% are important context metrics when evaluating RTX's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of RTX?
RTX Corporation currently generates $6.20 in free cash flow per share. At the current price of $183.53, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is RTX undervalued?
RTX trades at a P/FCF ratio of 29.6x with a free cash flow yield of 3.38%. This P/FCF is in a moderate range. However, whether RTX is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value RTX stock using DCF?
To perform a DCF valuation on RTX Corporation: (1) Start with the trailing free cash flow per share ($6.20) 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 — with a debt-to-equity of 0.59x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to RTX?
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 company will produce over the next 5-10 years, shaped by Aerospace & Defense trends, then discounting those amounts to today's dollars. RTX's ROIC of 6.9% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect RTX stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For RTX, with a debt-to-equity ratio of 0.59x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 18.1x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See RTX PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Industrials valuationsDCF and P/E value RTX with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.