On Wednesday, Susquehanna maintained a Positive rating on RTX Corp. (NYSE: RTX) and increased its price target to $119 from the previous $110. The adjustment follows RTX's first-quarter earnings for 2024, which surpassed expectations. RTX reported an earnings per share (EPS) of $1.34, topping the analyst's estimate of $1.25 and contributing to a strong start towards achieving the full-year EPS guidance range of $5.25 to $5.40.
The firm's optimism is buoyed by RTX's significant backlog, along with promising revenue growth prospects in its Commercial, Defense, and Aftermarket segments. The potential for margin expansion across various business units of RTX also contributed to the revised price target. Susquehanna has updated its EPS estimates for the years 2024 and 2025 to $5.40 and $6.22, respectively, adjusted from the previous estimates of $5.39 and $6.31.
RTX's robust performance is attributed to its strategic positioning as a key supplier in both the Commercial and Defense sectors. This strategic positioning is underscored by over $25 billion in new orders received in the first quarter of 2024 and a record backlog reaching $202 billion. The commercial segment accounts for $125 billion of the backlog, while the Defense segment comprises $77 billion.
The company's geared turbofan (GTF) engine repair timeline is reportedly on track, which is crucial for RTX's operations. Additionally, the company's target for free cash flow generation in 2024 is approximately $5.7 billion, aligning with its financial goals and operational forecasts. This financial stability and growth outlook underpin the raised price target and the continued Positive rating for RTX Corp. by Susquehanna.
InvestingPro Insights
As RTX Corp. (NYSE: RTX) continues to impress with its financial performance, real-time data from InvestingPro provides additional context to Susquehanna's positive outlook and price target increase. With a robust market capitalization of $134.43 billion and a forward-looking P/E ratio for the last twelve months as of Q1 2024 at 39.31, RTX's valuation reflects strong investor confidence. The company has also demonstrated a consistent revenue growth of 3.56% over the last twelve months, indicating a steady upward trajectory in its financials.
Significantly, RTX's management has been actively involved in share buybacks, an InvestingPro Tip that often signals a bullish stance on the company's valuation and future prospects. Additionally, RTX is expected to maintain its dividend payments, which have been consistent for 54 consecutive years, offering investors a reliable income stream. This is particularly noteworthy as the current dividend yield stands at a respectable 2.33%.
For investors seeking more in-depth analysis, InvestingPro offers additional tips on RTX, including insights into the company's expected net income growth this year and its status as a prominent player in the Aerospace & Defense industry. To access these insights and more, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With 11 more InvestingPro Tips available, investors can gain a comprehensive understanding of RTX's market position and potential investment opportunities.
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