Trying to decide what to do with RTX stock? You’re not alone. Whether you’re a long-term investor or just keeping an eye out for the next big swing, RTX has definitely captured attention with its impressive performance. Over the past year, the stock has jumped a generous 45.6%, with a stunning 54.0% return year-to-date. That momentum is not slowing down. RTX surged 13.1% this past week and 9.4% over the last 30 days. If you zoom out even further, the five-year return clocks in at a jaw-dropping 270.1%. High numbers like these always get people talking about growth potential, but they also raise questions about whether the market is getting ahead of itself.
Recent headlines have given RTX’s latest rally some extra fuel. The company’s strategic moves in the aerospace and defense sectors have reaffirmed to investors that it is still a major player, drawing attention for positive developments in technology and contracts. There have not been any dramatic surprises to shake confidence, but market watchers are clearly renewing their optimism about RTX’s prospects amid industry shifts.
With all this excitement, you are probably wondering about RTX’s true value. Our quick scan of valuation checks shows that RTX is undervalued in just 1 out of 6 criteria, which is a value score of 1. At first glance, it does not exactly suggest a bargain. But as we break down what is behind those numbers, you will see the bigger picture. Next, let’s dig into the different ways analysts measure a company’s value, and stick around as we also explore a powerful alternative for understanding RTX’s valuation at the end of the article.
RTX scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
The Discounted Cash Flow (DCF) model estimates a company’s value by projecting its future cash flows and discounting them back to today’s dollars. This method gives investors a sense of what the business could fundamentally be worth if those cash flows materialize as expected.
RTX’s most recent reported Free Cash Flow is $4.47 billion. According to analyst forecasts, RTX’s annual free cash flow is projected to rise significantly over the coming years, with an estimated $10.77 billion expected by the end of 2029. While analyst estimates are available for the next few years, projections for the later years are modeled based on historic growth and trends by Simply Wall St, so precision decreases further out as a result.
After factoring in these projections and discounting future values, RTX’s intrinsic value is calculated at $135.85 per share. However, the model indicates RTX stock currently trades at a 31.5% premium to its DCF-calculated value. This means it is considered overvalued according to this approach.
Result: OVERVALUED
Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for RTX.
RTX Discounted Cash Flow as at Oct 2025
Our Discounted Cash Flow (DCF) analysis suggests RTX may be overvalued by 31.5%. Find undervalued stocks or create your own screener to find better value opportunities.
The Price-to-Earnings (PE) ratio is a popular metric for valuing profitable companies like RTX, because it tells investors how much they are paying for each dollar of current earnings. This makes it especially useful for companies in mature industries where profits are a key measure of value. A company’s PE ratio can look high or low depending on expectations for future growth and how risky investors perceive its earnings to be. Higher earnings growth or lower risk often justify a higher PE.
RTX currently trades at a PE ratio of 36.34x. For context, the average PE across the Aerospace and Defense industry is 39.61x, while its direct peers have an average PE of 27.62x. This puts RTX’s PE below the industry average but noticeably above the peer average, suggesting a middle-of-the-road position depending on which benchmark you prioritize.
Simply Wall St’s proprietary “Fair Ratio” takes this a step further by factoring in RTX’s growth projections, risk profile, profitability, industry, and market capitalization, and arrives at a fair PE of 34.31x for RTX. This tailored approach provides a much more complete picture than simply comparing RTX to broad industry or peer benchmarks, because it directly considers the characteristics unique to the business and sector dynamics.
Given that RTX’s current PE of 36.34x is very close to its Fair Ratio of 34.31x, the stock appears to be priced about right according to this metric.
Result: ABOUT RIGHT
NYSE:RTX PE Ratio as at Oct 2025
PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.
Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is a simple yet powerful tool that allows you to share your perspective, the story you see behind the numbers, by making your own estimates for RTX’s future revenues, profit margins, earnings, and the fair value you believe those assumptions justify.
Narratives bridge the gap between a company’s story and a financial forecast, tying together your thesis about RTX’s prospects with concrete numbers and a fair value calculation. With Narratives on Simply Wall St’s Community page, millions of investors can easily build, update, or reference these forecasts as the latest news or earnings come in, ensuring your point of view always remains relevant.
Instead of relying solely on static analyst models or traditional valuation multiples, Narratives empower you to decide when RTX may be fairly valued by directly comparing your fair value estimate with the current share price. For example, some investors may project strong global defense spending and optimistic earnings growth, supporting a fair value of $180 per share, while others focus on headwinds and uncertainties, leading to a more cautious $134 per share. Each Narrative evolves dynamically as new data arrives, helping you make more informed, story-driven investment decisions.
Do you think there’s more to the story for RTX? Create your own Narrative to let the Community know!
NYSE:RTX Community Fair Values as at Oct 2025
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include RTX.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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