Morgan Stanley raises RTX PT to $180 from $165, maintains Overweight rating.

Morgan Stanley raises RTX PT to $180 from $165, maintains Overweight rating.

Morgan Stanley has increased its price target for RTX Corporation (RTX) to $180 from $165, while maintaining an Overweight rating on the shares. This move follows the firm's recent upgrade of the company's prospects, driven by several factors.

The aerospace sector is experiencing unprecedented valuation levels, reflecting the sector's robustness. Morgan Stanley highlights that the recent rise in valuations underscores the sector's resilience, with expectations that industry dynamics will continue their positive trajectory [2].

The firm points out that the aerospace supply chain shows signs of improvement, with production momentum from companies like Boeing and sustained air traffic demand favoring an optimistic outlook on aerospace stocks [3]. RTX Corporation operates through various segments, including Collins Aerospace Systems, Pratt and Whitney, Raytheon Intelligence and Space, and Raytheon Missiles and Defense, providing aerospace and defense services and systems to military, commercial, and government customers [2].

Analysts forecast an average target price of $144.88 for RTX Corp, with a high estimate of $182.00 and a low estimate of $99.00, indicating a downside of 3.52% from the current price of $150.17 [3]. The average brokerage recommendation is currently 2.2, indicating "Outperform" status [3].

RTX Corp reported an 8% organic sales growth in the first quarter of 2025, with a 120 basis points expansion in segment margins and strong contributions from all business segments. Commercial aftermarket sales increased by 21%, and defense sales grew by 4% year-over-year [3]. The company generated strong free cash flow, improving by $900 million compared to the previous year [3].

However, RTX Corp faces potential cost impacts of $850 million due to tariffs, which could affect profitability if they remain in place. The company has not included potential tariff impacts in its outlook for the year, indicating uncertainty in financial projections [3].

In conclusion, Morgan Stanley's upgrade reflects the company's positive outlook on RTX Corporation's prospects, driven by the sector's resilience and the company's strong operational performance. However, the potential impact of tariffs on profitability remains a concern.

References:
[1] https://www.tmtbreakout.com/p/tmtb-morning-wrap-098
[2] https://finance.yahoo.com/news/morgan-stanley-raises-pt-rtx-043518201.html
[3] https://www.gurufocus.com/news/2984064/rtx-gains-favor-as-morgan-stanley-boosts-price-target-rtx-stock-news