RTX

ACCE thesis

RTX manufactures jet engines, defense missiles, and aerospace systems through Pratt & Whitney, Raytheon, and Collins Aerospace divisions. The company dominates commercial engine aftermarket services with 70%+ margins and multi-decade revenue visibility as airlines expand fleets globally. Pentagon spending acceleration and NATO defense budget increases following Ukraine create a multi-year tailwind for the Raytheon missile portfolio. Trading at 26x forward earnings despite sitting on a $200 billion commercial aerospace backlog that stretches into the 2030s. Free cash flow generation should accelerate meaningfully as supply chain constraints ease and aftermarket revenues compound.

• high
  Stock above fair value

  Current price $195.78 exceeds model fair value $180 and sits above the top of the $165.60-$194.40 fair value range.
• high
  Heavy insider selling

  Last 10 disclosed transactions show $40.64M in sales and $0 in buys - entirely one-directional insider distribution.
• moderate
  QoQ revenue deceleration

  Sequential quarterly revenue declined 8.9% despite strong YoY growth of 8.7%, signalling potential near-term momentum slowdown.
• moderate
  Stretched valuation multiples

  P/E of 36.8x and EV/EBITDA of 19.2x are elevated for a low-single-digit 5-year revenue CAGR of 4.5%.

Snapshot