Watching
RTX · RTX Corporation
Updated ·
Against its published line
Above its line on the last close.
How to read this
The red mark is the published kill line — the price that would prove the thesis wrong. The dot is where the name closed on 9 October 2026; a dot left of the mark has closed through its line.
Distance is drawn on a square-root scale, so close calls get the room. Past 8% a row reads well clear, with a hollow dot to show the figure is off the drawn scale. Rows run tightest first.
Kill line
A daily close below $170, which would extend the sector selloff well beneath the 8 October 2026 close of $184.32. A cut to the $7.10–$7.25 full-year adjusted EPS guidance at the 20 October 2026 report would also break the case.
Open pick Medium conviction, opened at $185.01. Since then +0.5% against the S&P 500's +1.9% (−1.4 pp). Kill line at open: $170.00 (daily close); graded by at the latest.
Catalyst (in 8 days)
How picks are graded →The thesis
RTX Corporation keeps winning large multi-year missile contracts while its shares trade with a falling defense sector. The 20 October 2026 third-quarter report decides whether earnings and backlog give the shares a reason to separate from the sector. The shares closed at $184.32 on 8 October 2026, 18.3% below their $225.49 52-week high and down 5.8% over three months, according to adjusted daily closes.
The newest award arrived on 8 October 2026. Benzinga reported that the Department of War gave Raytheon a $6.3 billion multi-year contract for SM-3 Block IB interceptors. That follows an AMRAAM award worth up to $20.7 billion on 28 September 2026 and an SM-6 award worth up to $24.4 billion on 1 October 2026.
The defense narrative is maturing: the story is well known, and three multi-year missile awards in eleven days moved the shares only from $183.29 on 6 October 2026 to $184.32 on 8 October 2026. The selling comes from the sector, driven by Iran peace talks and a stalled federal budget. About $170 billion of RTX's $289 billion backlog is commercial aerospace, which those headlines do not drive.
Bullish and bearish views on RTX Corporation
The bull case on RTX Corporation (RTX), in brief: A third missile award in eleven days. The bear case: Contracts are signed but not funded.
Bull case
- A third missile award in eleven days. Benzinga reported on 8 October 2026 a $6.3 billion multi-year contract for SM-3 Block IB interceptors. The US Navy's five-year SM-6 contract, worth up to $24.4 billion plus two option years, came on 1 October 2026, per RTX's release.
- AMRAAM production is being expanded. The Pentagon awarded Raytheon a multi-year AMRAAM air-to-air missile contract worth up to $20.7 billion on 28 September 2026, citing low US stockpiles, Benzinga reported.
- Guidance was raised on every line. On 23 July 2026 RTX raised 2026 adjusted sales guidance to $95.0–$96.0 billion and adjusted earnings per share (EPS) guidance to $7.10–$7.25, from $6.70–$6.90. Free cash flow guidance rose to $8.50–$8.75 billion.
- Record backlog across two markets. Backlog was $289 billion on 30 June 2026, up 22% year over year, with $170 billion commercial and $119 billion defense, per the Q2 2026 release.
- The quarterly bar looks low. A Barchart preview on Yahoo Finance dated 1 October 2026 put third-quarter EPS expectations at $1.75, against $1.70 in Q3 2025.
- Analyst targets sit above the price. MarketBeat put the consensus average target at $228.06 on 23 September 2026. Bernstein cut its target to $223 from $232 that day and kept a Market Perform rating.
Bear case
- Contracts are signed but not funded. Industry executives warned, per Federal Times on 1 October 2026, that Congress has not appropriated money for the multi-year munitions deals. Contractors may delay spending on parts and plants until it does.
- The defense budget is frozen for now. A stopgap bill holds federal spending at 2026 levels through 11 December 2026, and neither chamber had passed full-year appropriations, Benzinga reported on 29 September 2026.
- The sector is in a record losing streak. Benzinga reported on 29 September 2026 that the SPDR S&P Aerospace & Defense ETF (XAR) was heading for a seventh straight weekly loss, its first such streak since 2011.
- Iran policy cuts both ways. President Trump told Time magazine, as Benzinga reported on 1 October 2026, that he may increase strikes on Iran after the midterms if there is no deal. A signed deal would remove the premium munitions demand has carried this year.
- China trade talks touch aerospace. Benzinga reported on 1 October 2026 that the administration has been taking steps to use China's dependence on US aviation suppliers as leverage in trade talks. Restrictions would hit Pratt & Whitney engines and Collins Aerospace parts.
Price setup
The shares closed at $184.32 on 8 October 2026, against a 52-week high of $225.49, per adjusted daily closes. They are down 5.8% over three months. The 14-day relative strength index (RSI), a momentum gauge, stood at 28.5 on 8 October 2026, below the 30 level usually read as oversold.
Recent closes show a narrow range despite heavy contract news: $185.01 on 1 October 2026, $183.29 on 6 October 2026 and $184.32 on 8 October 2026. The crowding evidence points away from a crowded trade. Momentum is oversold and the sector is under sustained selling. The one near-term concentration of attention is the earnings date on 20 October 2026.
Catalysts, next 30 days
- 20 October 2026 — Q3 2026 earnings, before the market opens. Shows whether backlog rises above $289 billion with the AMRAAM, SM-6 and SM-3 awards, and whether the $7.10–$7.25 adjusted EPS guidance holds or rises.
- 3 November 2026 — US midterm elections. Bernstein called the vote a clearing event for defense stocks, and President Trump tied possible further Iran strikes to the period after it.
- 11 December 2026 — Stopgap funding bill expires. Outside the 30-day window, but full-year appropriations decide whether the new multi-year munitions contracts are funded above 2026 levels.
What would change the view
The case breaks if the 20 October 2026 report cuts the $7.10–$7.25 full-year adjusted EPS range, or if backlog falls below the $289 billion reported for 30 June 2026 despite the new missile awards. A daily close below $170 would show the sector selloff overwhelming the company's order flow, well beneath the 8 October 2026 close of $184.32.
Policy can also break it. Another stopgap past 11 December 2026 with no full-year funding for the munitions deals would delay revenue from them. A signed US–Iran agreement followed by smaller munitions orders, or export limits on US engines and parts bound for Chinese aircraft programs, would weaken separate parts of the case.
What it trades with
RTX moves with the defense group: it and Lockheed Martin each fell 3% on the Iranian Hormuz report, Yahoo Finance reported, and XAR's losing streak covers the same weeks as RTX's slide. Its commercial half, Collins Aerospace and Pratt & Whitney, ties it to airline traffic and aircraft deliveries, which defense-only peers lack. Federal budget headlines, Iran headlines and China trade headlines each act on a different part of the company.
Notes
- RTX reports results from both commercial aerospace (Collins Aerospace, Pratt & Whitney) and defense (Raytheon), so sector headlines affect each part differently.
- Defense revenue depends on US appropriations. A continuing resolution holds spending at prior-year levels until Congress passes a full budget.
- Multi-year munitions contracts are awarded with ceiling values; actual revenue depends on yearly funding from Congress and on orders placed under each contract.
- Many news headlines mentioning "RTX" refer to Nvidia's RTX graphics products and are unrelated to RTX Corporation.
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