The defense industry is booming right now and one company that is benefiting is RTX Corp. It’s the owner of both land and air defense systems specialist Raytheon and aerospace engine powerhouse Pratt & Whitney.
Recently, RTX posted its earnings for the fourth quarter of 20251 and they were better than expected, with both revenue and profits topping estimates. Here’s a look at some highlights from the Q4 report and analysts’ reactions to the print.
Solid Growth in Q4
For Q4 2025, RTX generated sales of $24.2 billion, up 12% versus the prior year. This figure was comfortably ahead of the consensus forecast of $22.7 billion.2
Adjusted earnings per share (EPS) for the period was $1.55 versus $1.47 expected. Meanwhile, free cash flow was $3.2 billion compared to $492 million a year earlier.2
Zooming in on the company’s defense segment, Raytheon, sales here were up 7% year on year on an adjusted basis to $7.7 billion. This increase was driven by higher volume on land and air defense systems, including Patriot and GEM-T, as well as higher volume on naval programs, including Evolved SeaSparrow Missile and Tomahawk.
Adjusted operating profit in the Raytheon division amounted to $885 million, up 22% year on year. This increase was driven by improved net productivity, higher volume, and favorable program mix.
Outside Raytheon, performance in the company’s aerospace engine division, Pratt & Whitney, was very strong. Here, adjusted sales were up 25% to $9.5 billion, driven by a 30% increase in military sales (higher F135 production volume).
Growing Backlog and Healthy Guidance
At the end of the fourth quarter, RTX had a total backlog of $268 billion with defense spending accounting for $107 billion of this. A year earlier, the defense backlog was 13% lower at $93 billion.
In terms of guidance, RTX said that it is targeting adjusted sales of $92.0 to $93.0 billion for 2026 versus $88.6 billion in 2025. Adjusted EPS is expected to be between $6.60 and $6.80 versus $6.29 for 2025.
Higher Share Price Targets
Since the company’s Q4 earnings, several Wall Street firms have increased their price targets for RTX stock including:
Morgan Stanley: $215 to $235
UBS: $199 to $208
RBC Capital: $220 to $230
TD Cowen: $210 to $225
These price targets3 are all above the current share price, signaling that analysts see further upside for the stock.
Footnotes:
1RTX reports 2025 results and announces 2026 outlook, as of January 27, 2026
2Investing.com, RTX Corp says it is "well positioned" to meet 2026 targets amid solid demand, as of January 27, 2026
3Investing.com, Rtx Corp (RTX), as of January 28, 2026
