RTX Corporation: Navigating Tariffs and Geopolitical Winds with Cramer’s Stamp of Approval

Jim Cramer’s recent praise for Raytheon Technologies Corporation (RTX) has positioned the aerospace and defense giant as a standout play in a market roiled by geopolitical tensions and shifting trade policies. “You nailed the tariff story – spot on,” Cramer declared, underscoring RTX’s ability to navigate headwinds while capitalizing on defense modernization and commercial aerospace recovery. Here’s why investors should take notice.

Financial Fortitude Amid Uncertainty

RTX’s first-quarter 2025 results delivered a clear rebuttal to concerns about its exposure to tariffs and supply chain disruptions. Organic sales rose 8%, fueled by its commercial aftermarket and defense businesses. Defense bookings hit $9 billion, while its commercial backlog swelled to $125 billion, signaling strong demand for aircraft engines and aerospace technology. The company’s cash reserves of $5.16 billion further reinforce its financial flexibility, a critical asset as trade wars intensify.

Tariffs: A Near-Term Threat, Not a Death Knell

U.S. tariffs on imports from China and others, coupled with retaliatory measures from the EU and Canada, have raised concerns about margin compression. RTX’s reliance on imported components, particularly for commercial aerospace, leaves it vulnerable. However, the company’s $125 billion commercial backlog and $9 billion in quarterly defense bookings provide a buffer against short-term demand shocks. Cramer also highlights RTX’s supply chain resilience, noting that 80 hedge funds held the stock as of Q4 2024—a vote of confidence in its ability to weather trade tensions.

Outperforming Peers in a Turbulent Market

While RTX has underperformed Lockheed Martin (LMT) over the past three months (down 9.2% vs. LMT’s 7% decline), its longer-term trajectory is stronger. The stock has risen 12.2% over 12 months, versus LMT’s flat performance. Cramer attributes this to RTX’s balanced portfolio, which combines defense strength (e.g., F-35 fighter jets, hypersonic defense systems) with commercial aerospace resilience.

Valuation and Institutional Backing

RTX trades at a forward P/E of 17.93x, modestly above Lockheed’s 16.58x, but Cramer argues the premium is justified. The company’s diversified exposure to defense modernization, commercial aviation recovery, and cutting-edge threat-detection technologies offers a unique growth profile. Institutional support is robust, with hedge funds maintaining stakes despite near-term volatility.

Geopolitical Tailwinds

The U.S. defense budget is set to grow by $74 billion in 2025, directly benefiting RTX’s contracts for platforms like the F-35 and hypersonic missile systems. Cramer emphasizes RTX’s insulation from Federal Reserve policy uncertainty, as its business lines are less sensitive to interest rates than tech or consumer stocks.

Risks on the Radar

RTX’s $38.24 billion in long-term debt and exposure to global supply chains remain risks. Persistent tariffs could squeeze margins, and competition from Lockheed’s $172.97 billion defense backlog poses a challenge. However, RTX’s commercial backlog and institutional support mitigate these concerns.

Conclusion: A Defensive Growth Play with Upside

RTX’s Q1 results, diversified backlog, and Cramer’s advocacy paint a compelling picture. With 4.4% sales growth and 7% EPS growth expected in 2025 (per Zacks), the company is positioned to outperform in both defense and commercial markets. While tariffs pose near-term risks, RTX’s financial strength, geopolitical demand drivers, and institutional backing make it a “must-own” for investors seeking stability.

In a market where volatility reigns, RTX’s $125 billion commercial backlog and strategic alignment with global defense spending trends suggest it has the altitude to soar. For long-term investors, this is a stock to own—not just for today’s challenges, but for the flight ahead.