Raytheon Technologies (RTX) Shares Rally 0.67% to 2025 High on Earnings Beat, Guidance Hike

Shares of Raytheon Technologies (RTX) climbed 0.67% on Monday, reaching their highest level since July 2025, with an intraday gain of 1.74%. The rally reflects renewed investor confidence in the aerospace and defense giant following a series of strategic and financial milestones.

The strategy of buying RTX shares after they reached a recent high and selling them one week later yielded moderate returns but underperformed the benchmark. The strategy achieved a 52.27% return, while the benchmark returned 61.05%. The Sharpe ratio was 0.76, indicating a reasonable risk-adjusted return. However, the maximum drawdown was 0%, suggesting the strategy avoided losses but did not capitalize on longer-term gains.

RTX’s Q2 2025 earnings report served as a key catalyst, with revenue hitting $21.6 billion and adjusted earnings per share (EPS) of $1.56 surpassing expectations. RBC Capital upgraded its price target to $170 from $140, citing strong demand for defense systems and cost discipline. The company also raised its 2025 revenue guidance by 2% at the midpoint, despite a 3% EPS forecast reduction due to ongoing tariff pressures.

Technological advancements further bolstered RTX’s appeal. Raytheon’s launch of the MTS-A HD targeting system for naval helicopters highlighted its innovation edge, aligning with industry demand for precision defense solutions. Recent contract wins, including a $32.5 million deal for U.S. Marine Corps components and a $51.9 million order for Stinger launchers, reinforced its dominance in critical defense programs.

Analyst sentiment remained cautiously optimistic. While RBC Capital maintained an “Outperform” rating, Goldman Sachs retained a “Neutral” stance at $141, citing uncertainties around free cash flow and tariff impacts. RTX’s current valuation, with a 1.74% dividend yield and a five-year total return of 206.30%, attracted income-focused investors, though some warned of potential overvaluation amid strong historical performance.

Challenges persist, particularly from tariffs, which previously caused a 9.8% stock decline in April. RTX’s transparent communication and mitigation strategies, however, helped restore confidence. The company’s ability to navigate geopolitical risks and maintain its 55-year dividend streak underscores its resilience. With the S&P 500 hitting record highs, RTX’s alignment with defense spending trends positions it to capitalize on long-term industry tailwinds.