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When it comes to aerospace and defense, few companies are as strategically positioned as RTX Corp. With a rare 50/50 split between commercial aviation and defense contracts, RTX operates through industry powerhouses like Pratt & Whitney, Collins Aerospace, and Raytheon.

Its engines power popular aircraft like the Airbus A320neo, while its missile systems and secure communications are critical to U.S. defense strategy.

As tensions escalate in the Middle East, particularly with the ongoing Iran–Israel conflict and increasing U.S. military involvement, defense stocks like RTX are back in the spotlight.

Raytheon’s missile and sensor technologies are directly aligned with U.S. national defense priorities, making the company a key player in the evolving geopolitical landscape. These developments, while concerning, are reinforcing the long term demand for defense modernization and readiness.

Despite some headwinds, from engine defect costs to supplier margin pressures, RTX approaches the second half of 2025 with strong financial footing, a deep backlog of government contracts, and growing demand across both commercial and military segments.

Its razor-and-blade model ensures recurring high margin revenue, and global instability is likely to sustain long-term defense spending.

Of course, no stock is without risk. Complexity from its post merger structure and the potential for delayed military budgets or airline pushback may weigh on sentiment. But with solid cash flow, disciplined capital allocation, and exposure to two massive global markets, RTX offers long-term investors a resilient and diversified growth play.

So is RTX just another cyclical industrial stock, or a dual sector powerhouse quietly fueling the future of global security and aviation?

Let’s break it down using the Invest Diva Diamond Analysis (IDDA) Framework:
Capital, Intentional, Fundamental, Sentimental, and Technical.

IDDA Point 1 & 2: Capital & Intentional

Before investing in RTX Corp, ask yourself:

 Are you looking for a stock that gives you exposure to both commercial aerospace and global defense, with built-in diversification?

 Do you believe in the long-term demand for aircraft engines and the need for ongoing national defense modernization?

 Are you comfortable with short-term risks like engine repair costs and margin pressure from major aircraft manufacturers?

With products ranging from next-gen jet engines to missile defense systems, it plays a crucial role in keeping the world connected and secure. Its razor-and-blade business model, selling engines at low margins but servicing them for decades, creates reliable, high margin recurring revenue.

But RTX comes with challenges. The company is still navigating costly manufacturing issues with some Pratt & Whitney engines, and major aircraft makers like Boeing and Airbus continue to push down supplier margins. Operational complexity from its large scale merger also means it must work harder to stay agile.

If you’re building a portfolio that leans into stability, global infrastructure, and the long game in both aviation and defense, RTX could be a strong long-term play.

Just know: RTX isn’t a flashy growth stock. It’s a strategic, steady performer designed for investors who want reliable exposure to two essential global industries.

RTX is for pragmatic investors who value diversification, long-term cash flow, and resilience across economic cycles.

IDDA Point 3: Fundamentals

RTX is a well-diversified aerospace and defense company with a rare and strategic balance between commercial and defense revenue streams. On the commercial side, it operates through Collins Aerospace, one of the world’s largest suppliers of aircraft components and systems, and Pratt & Whitney, which is steadily increasing deliveries of its PW1000 geared turbofan (GTF) engines. These engines power widely used aircraft like the Airbus A320neo and A220. This segment follows a razor-and-blade business model, where initial engine sales may yield low margins, but the long term servicing and parts replacement generate reliable, high-margin recurring revenue. Given the dominance of the A320 family in the narrow-body market, Pratt & Whitney is positioned to benefit from decades of ongoing service income.

In its defense operations, Raytheon provides critical technologies including missiles, missile defense systems, sensors, and secure communication, serving primarily government agencies. With heightened geopolitical tensions and a continued emphasis on military modernization, RTX is expected to maintain growth in this segment. Even in a potentially flat budget environment, strong existing backlogs and sustained demand should support its defense outlook.

Financially, RTX stands on solid ground. The company has made strategic moves, such as spinning off non-core businesses and merging with Raytheon, which had a stronger balance sheet. These steps have helped reduce overall leverage, and RTX now benefits from steady cash flows generated by its ultra-long-cycle businesses. Management remains focused on further deleveraging and returning capital to shareholders, while maintaining discipline through selective acquisitions and occasional divestments aimed at sharpening its core focus.

Despite recent Middle East tensions and a short-term rally in defense stocks, analysts have not revised their long term valuations for defense contractors like RTX. The company’s current outlook already reflects anticipated growth in missile defense development and resupply. Historically, armed conflicts have not significantly altered the fundamental trajectory for these firms. While short-term boosts in munition orders may occur, they usually represent only a small portion of total revenue.

Prolonged conflict can strain defense budgets, diverting funds away from areas like R&D and procurement, which are the primary revenue drivers for contractors, toward more immediate operational and logistical needs. Assumptions that war directly fuels defense stock gains overlook the long lead times and political constraints involved in military procurement. Although geopolitical instability can influence overall defense budgets, analysts believe we are already in a defense spending “super cycle,” which limits further upside from current global tensions.

Fundamental Risk: Medium 

IDDA Point 4: Sentimental

Strengths

Strong Engine Placement

: Pratt & Whitney engines are installed on high-demand aircraft like the A320neo and A220, setting up decades of high-margin servicing revenue from a growing installed base.

Defense Segment Alignment

: Raytheon’s missile and missile defense products align closely with the U.S. National Defense Strategy, supporting consistent and prioritized government spending.

Balanced Business Model

: RTX’s even split between commercial aerospace and defense provides resilience against downturns in either market, making it less vulnerable than more concentrated peers.

Risks

Operational Complexity: Despite the merger’s focus, RTX remains a large and complex entity, which could hinder agility and operational focus compared to more specialized competitors.

Supplier Margin Pressure: Major aircraft manufacturers like Boeing and Airbus aim to reduce supplier costs, potentially compressing margins for Collins Aerospace.

Engine Defect Costs: Manufacturing issues with Pratt & Whitney engines are expected to cost billions in customer compensation and may harm future demand from airlines.

Following news of Israel’s strikes on Iranian facilities, shares of global defense contractors surged by up to 4% in early trading. However, analysts view this spike as an emotional and exaggerated market reaction rather than a reflection of actual long term business impact. Investors often draw a direct link between military conflict and defense company profits, but this connection is rarely so immediate or straightforward. Much of the buying appears driven by sentiment, either as a short-term tactical rotation into a sector seen as resilient to macro shocks, or based on assumptions that conflict will automatically boost revenues.

Sentimental Risk: High

IDDA Point 5: Technical

On the weekly chart: 

Bullish Future Cloud

: The Ichimoku cloud is wide and bullish, signaling continued upward momentum.

Cloud as Support

: Price has tested the cloud multiple times, but it continues to hold as a support zone, with no decisive break below.

Bullish Candlesticks

: The overall pattern remains in an uptrend, with recent bullish engulfing candles further reinforcing the positive momentum.

We can see on the weekly chart that RTX has been on an uptrend since October 2023 and recently reached a new high of 149. Technical signals are bullish, where the Ichimoku cloud is wide and bullish, suggesting strong ongoing upward momentum.

The cloud has acted as a reliable support zone, with price testing it a couple times without breaking below. Additionally, the overall trend remains upward, and the appearance of recent bullish engulfing candlesticks supports the continuation of this bullish sentiment. RSI is overbought at 67.65 which means that there’s a chance a pullback might happen in the near term.

(Click on image to enlarge)

Investors looking to invest in RTX can consider these Buy Limit entries: 

Current market price 146.64 (High Risk – FOMO Entry)

129.62 (High Risk)

117.53 (Medium Risk)

107.75 (Low Risk)

Investors looking to take profit can consider these Sell Limit levels:

168.52 (Short term)

181.09 (Medium term)

190.82 (Long term)

200.56 (Long term)

Here are the Invest Diva ‘Confidence Compass’ questions to ask yourself before buying at each level:

1. If I buy at this price and the price drops by another 50%, how would I feel? Would I panic, or would I buy more to dollar-cost average at lower prices? (hint: this question also reveals your CONFIDENCE in the asset you’re planning to invest in).
2. If I don’t buy at this price and the stock suddenly turns around and starts going up again, will I beat myself up for not having bought at this level?

Remember: Investing is personal, and what is right for me might not be right for you. Always do your own due diligence. You should ONLY invest based on your own risk tolerance and your timeframe for reaching your portfolio goals.

Technical Risk: Medium

Final Thoughts on RTX Corp

RTX Corp stands out as a balanced aerospace and defense company, uniquely positioned with an even split between commercial and government contracts.

On the commercial side, Collins Aerospace and Pratt & Whitney benefit from strong placements on high-demand aircraft like the A320neo and A220, unlocking decades of high-margin servicing revenue.

On the defense front, Raytheon’s missile systems and secure communications align with U.S. strategic priorities, offering stability even in flat budget environments. Financially, the company is sound, reducing debt, generating reliable cash flows, and focusing on long cycle businesses.

While geopolitical tensions recently caused a short-term rally in defense stocks, analysts view this as sentiment driven and not reflective of long-term fundamentals, especially since military procurement is typically pre-planned and slow-moving.

Investors are encouraged to consider the short term risks such as engine defect costs and supplier margin pressures. However overall, RTX’s diversified model, strong product positioning, and bullish technical signals, including a wide Ichimoku cloud and recent bullish candlesticks, support its continued upward trend.

Entry points around $129.62 to $146.64 and profit targets at $168.52–$200.56 may appeal to investors looking for a structured opportunity.

Recommendation: Buy / Moderate Risk, Long Term Growth Asset

RTX Corp presents a compelling opportunity for long-term investors seeking exposure to both commercial aerospace and defense sectors. With strong placements in high-demand aircraft engines and alignment with U.S. defense priorities, RTX benefits from recurring servicing revenue and resilient government contracts. While risks remain from engine defect costs and supply chain pressures, its diversified model, solid balance sheet, and long-cycle cash flows support sustainable growth. RTX can be considered a moderately bullish pick for investors looking for stability, strategic positioning, and upside in a shifting geopolitical and aviation landscape.

Overall Stock Risk: Medium

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