Is RTX Stock Oversold After a Near-20% Fall?

RTX Corp stock has experienced a sharp pullback recently. Currently, it is trading near $175, down from around $210¹ in early March. Is there an opportunity to explore here? Let’s take a look at the setup for the S&P 500 aerospace and defense stock.

A Strong Performance in Q1

From an operational perspective, RTX has been performing well recently. For the first quarter² of 2026, sales amounted to $22.1 billion, up 9% year-over-year (+10% organic growth) while adjusted EPS came in at $1.78, up 21% year-over year. Breaking this performance down by division, Collins Aerospace saw 5% growth, Pratt & Whitney saw +11% growth, and Raytheon saw 10% growth. So, the strongest growth came from the company’s aircraft engine and defense divisions.

Looking ahead, RTX raised its guidance for the full year. It now expects adjusted sales of $92.5 to $93.5 billion, up from $92.0 to $93.0 billion. Guidance for adjusted EPS for 2026 is now $6.70 to $6.90, up from $6.60 to $6.80. Note that at the end of the period, the company had a backlog of $271 billion of which $162 billion was commercial and $109 billion was defense.

Analysts’ Views

Since the company’s Q1 earnings, a number of Wall Street firms, including Morgan Stanley, BofA Global Research, TD Cowen, and RBC, have reiterated their bullish views on the stock. While these firms acknowledge that the conflict in the Middle East could present some short-term challenges for RTX’s commercial aviation business, they continue to see potential for top-line growth and margin expansion amid rising demand for defense solutions. It’s worth pointing out that price targets³ from those four firms range from $220 to $230. So, all see the potential for material upside from current levels.

The Valuation

Turning to the valuation, it has come down substantially after the recent share price fall. With analysts forecasting earnings per share of $6.85⁴ for 2026, the forward-looking P/E ratio is around 25.5. That is above the S&P 500 average⁴ of 18. However, it is not excessively high considering the level of growth being generated.

The Risks

As for risks to the investment case, the main risk in the near term is weakness in the company’s commercial aviation division, Pratt & Whitney. Recently, major global airlines have been cutting back on flights due to high oil prices. For example, Lufthansa⁵ just announced that it will be cutting 20,000 flights this year to conserve fuel. Meanwhile, United Airlines⁶ has said that it will reduce its 2026 flights by 5%. Given that a significant portion of Pratt & Whitney’s commercial aftermarket revenue is linked to flying hours, this trend could present some challenges for the group in the short term. It’s worth noting that rival GE Aerospace recently reduced7 its forecast for global flight activity in 2026.

Technical Analysis

One other risk to point out is that the stock is trending down at present. The 200-day moving average – which currently sits at around $178⁴ – could offer some support but there is no guarantee here. One thing to highlight from a technical analysis perspective is that the stock’s relative strength index (RSI) sits at about 25⁴. That suggests that it is oversold at present.

An Opportunity?  

Weighing everything up, there are certainly reasons to be bullish on RTX stock at current levels. The company is performing well – helped by strong demand for defense solutions – and analysts are bullish. There are risks in the near term – high oil prices add some uncertainty to the investment case. However, with the stock down nearly 20% from its highs, it could be worth a closer look.

Footnotes:

¹Google Finance, as of April 24, 2026

²RTX, RTX Reports Q1 2026 Results, as of April 21, 2026

³Newsfile Refinitiv, Raytheon business to drive upside, as of April 22, 2026 

⁴LSEG, as of April 24, 2026

⁵BBC, Lufthansa cuts 20,000 summer flights as fuel prices surge, as of April 21, 2026

⁶Flight Global, ‘Big Four’ US airlines cut flights and raise fares as fuel shocks squeeze profits, as of April 23, 2026

⁷Azzet, GE Aerospace orders soar, cuts departure forecast, as of April 22, 2026