Cramer Says “Keep It” – RTX Corporation (RTX) Still Has Room to Fly

In a market increasingly dominated by speculative AI stocks and geopolitical volatility, Jim Cramer’s recent endorsements of Raytheon Technologies Corporation (RTX) highlight a stock that blends defensive resilience with long-term growth potential. As Cramer declared RTX the “best of the lot” in his April 17 Mad Money segment, investors are taking note of a company positioned to capitalize on rising defense spending, robust commercial backlogs, and institutional support. Here’s why RTX could continue to outperform in 2025—and beyond.

The Financial Foundation: Growth Amid Uncertainty

RTX’s first-quarter 2025 results underscore its financial stability. The company reported 8% organic sales growth, driven by its commercial aftermarket and defense businesses, with defense bookings hitting $9 billion in Q1. Its commercial backlog, at $125 billion, signals sustained demand for aircraft engines and aerospace technology. With $5.16 billion in cash and equivalents, RTX is well-positioned to navigate macroeconomic headwinds, including tariffs and supply chain disruptions.

Cramer’s confidence is further bolstered by Zacks’ projections: a 4.4% sales growth and 7% EPS increase for 2025, despite mixed near-term estimates. This stability contrasts with the volatility of many tech stocks, making RTX a defensive anchor in a shifting market.

Defense Sector Tailwinds: Geopolitics and Modernization

RTX’s diversified portfolio—spanning advanced aerospace systems, precision weapons, and threat detection—aligns with a global defense spending boom. Cramer emphasized that nations seeking better trade terms with the U.S. may accelerate purchases of American defense equipment, a trend benefiting RTX’s defense division.

The U.S. defense budget, projected to grow $74 billion in 2025, is a key driver. RTX’s contracts for platforms like the F-35 fighter jet and hypersonic defense systems are critical to this expansion. Even as trade tensions with China persist, RTX’s focus on domestic and allied markets mitigates geopolitical risks.

Challenges and Risks: Tariffs and Valuation Concerns

No investment is without risks. RTX faces tariffs on Chinese imports, which could squeeze margins if unresolved. Its supply chain resilience, however, remains intact, with a robust backlog shielding it from demand shocks.

Valuation is another consideration. RTX trades at a forward P/E of 17.93x, higher than peer Lockheed Martin’s 16.58x. While this reflects RTX’s diversified exposure, it could limit upside in a market prioritizing low-cost stocks.

Competitive Position: Outperforming Peers Over the Long Term

Despite underperforming Lockheed Martin (LMT) over three months—down 9.2% vs. LMT’s 7% drop—RTX has outpaced LMT over a year, rising 12.2% versus LMT’s flat performance. Cramer argues this reflects RTX’s balanced portfolio, combining defense strength with commercial aerospace resilience.

While LMT’s larger $172.97 billion defense backlog offers scale advantages, RTX’s commercial backlog and threat-detection expertise provide a unique moat. Both companies hold a Zacks Rank #3 (Hold), but RTX’s institutional backing—80 hedge funds held it as of Q4 2024—suggests a voting of confidence.

Cramer’s Perspective: A Bullpen Favorite for the Long Game

Cramer’s April 22 CNBC Investing Club mention of RTX as a “Bullpen name” underscores its role in his strategic portfolio. He acknowledges AI stocks’ allure for short-term gains but insists RTX’s fundamentals—cash reserves, backlog, and geopolitical tailwinds—make it a “must-own” for long-term growth.

Longleaf Partners Fund’s endorsement adds credibility, though specifics remain undisclosed. Cramer also notes RTX’s insulation from Fed policy uncertainty, as its business lines are less sensitive to interest rates than tech or consumer stocks.

Conclusion: RTX’s Flight Path Remains Clear

RTX Corporation is a defensive growth stock with multiple catalysts aligned in its favor:
1. Strong Financials: A $125 billion commercial backlog and $5.16B in cash provide a safety net.
2. Defense Tailwinds: Geopolitical tensions and modernization spending are fueling demand for RTX’s systems.
3. Institutional Support: 80 hedge funds hold RTX, signaling confidence in its resilience.
4. Valuation Balance: While its P/E is modestly higher than peers, its diversified cash flows justify the premium.

Cramer’s repeated endorsements and RTX’s outperformance over a year highlight its staying power. While near-term risks like tariffs linger, the stock’s long-term trajectory—bolstered by its critical role in global aerospace and defense—suggests it’s far from fully valued. For investors seeking stability in a turbulent market, RTX is a stock to keep, and one that could still soar.