RTX Corporation (NYSE:RTX) on Thursday lifted its sales and profit outlook for 2026, amid sustained demand for commercial aircraft maintenance and military systems, as airlines continue to rely on older fleets and governments restock weapons.

The aerospace and defense company now projects adjusted sales in the range of $95 billion to $96 billion, up from its earlier estimates of $92.5 billion to $93.5 billion. Wall Street has an average forecast of $94.08 billion. The full-year adjusted EPS is expected in the range of $7.10 to $7.25, up from $6.70 to $6.90, and above analysts’ forecast of $6.92 per share.

The forecast lift came during the second quarter earnings call on July 23, where RTX beat Wall Street’s estimates for both revenue and profit. Quarterly revenue came in at $24.7 billion, growing 14% year-over-year, while adjusted EPS was logged at $1.89, representing a 21% increase from the prior year’s period.

The Numbers Behind the Beat

The Pratt & Whitney unit, which manufactures engines for Airbus jets and the F-35, saw a 16% increase in sales to $8.89 billion, while demand for air and missile defense systems drove an 18% sales growth in the company’s Raytheon defense business. Collins Aerospace, which delivers advanced aviation systems, saw an 8% increase in sales.

The company said its backlog expanded 22% from the prior year’s period to $289 billion, which included $170 billion in commercial aerospace and $119 billion in defense-related orders. Operating cash flow during the quarter came in at $3.5 billion, resulting in free cash flow of $2.9 billion.

Aging Jets, Rising Threats

Supply chain constraints and delayed deliveries from Boeing and Airbus have resulted in a shortage of new commercial aircraft, because of which airlines are continuing to spend heavily on maintenance, ​repair, and overhaul (MRO) services.

During the quarter, RTX Corporation (NYSE:RTX)’s Pratt & Whitney business said it was investing over $100 million across three MRO sites in Texas, Florida, and Arkansas.

On the other hand, governments across the world are replenishing their weapons stockpiles, as the war between Russia and Ukraine rages, and conflicts in the Middle East intensify. Rising demand for the company’s air and missile defense systems, like Patriot, Standard, and AMRAAM missiles, drove sales growth in its defense business in Q2.

Bull Case

RTX’s robust backlog represents promising revenue visibility over the coming years, not just quarters.

The company is also seeing strong demand for both commercial and defense engines, which shall help in negating the impact of cyclicality compared to other pure-play competitors.

Moreover, the guidance lift for the full year reflects management’s confidence in its near-term trajectory and that it was not just a one-off result.

Structural tailwinds like increased MRO services demand for aging fleets and robust defense spending are likely to persist well beyond the coming quarters.

Bear Case

CFO Neil Mitchill acknowledged that part of the free cash flow improvement in Q2 was a result of catching up on delayed engine deliveries during the same period last year due to a four-week work stoppage at Pratt.

Besides, the company has been receiving international advances on all contract awards, especially in its defense business.

Organic revenue growth during the first half was 13%, while it is expected to be around 5% at the midpoint of RTX’s range. Mitchill said the Lot 18 F135 engine production contract in Q3 last year drove higher sales, while in Q2 this year the company caught up on delayed engine deliveries from the prior year, which will lead to comparisons of a slowdown in growth.

What is Wall Street Saying?

Following the Q2 report, UBS analyst Gavin Parsons on Friday lifted the firm’s price target on the stock to $215 from $198 and reiterated a Neutral rating. The analyst noted the strong quarterly results, while adding that RTX’s elevated valuation and aftermarket headwinds are items to watch ahead.

On the same day, Morgan Stanley also raised its price target by $20 to $240 per share and maintained an Overweight rating. In a research note to investors, the analyst said the beat-and-raise quarter reflected the company’s continuing growth story and strong execution. The firm believes RTX is positioned well for the second half of the year and 2027.

As of the close of business on July 25, Wall Street has a Moderate Buy rating on the stock, with an average share price upside potential of 6%.

Hedge Fund Ownership Trends

While the 13F filings data is awaited for Q2, institutional investors significantly increased their stake in the stock during the first quarter, with hedge fund ownership jumping 20% sequentially – from 79 funds to 95 funds.

As of March 31, 2026, Fisher Asset Management has the largest stake in the company, with 22,244,732 shares worth around $4.3 billion. Other major stakeholders include Balyasny Asset Management, at second, with an investment of $428 million, while Point72 Asset Management is at third with shares valued at approximately $395 million.

Closing Take

RTX Corporation (NYSE:RTX)’s fundamentals back a constructive long-term thesis. The management has lifted sales and earnings guidance for two successive quarters. Moreover, its robust backlog offers multi-year revenue visibility, while the structural tailwinds in both commercial aerospace and defense are likely to remain for the foreseeable future.

The stock trades at a forward P/E ratio of 29.83, above the sector median of 20.94, including peers like Lockheed Martin, General Dynamics, and Northrop Grumman. The figure is also higher than the company’s own five-year average of 21.49, suggesting that the stock already factors in a premium for its stronger growth and solid backlog.

Given this valuation, the risk-reward profile doesn’t look very attractive for new investors. The fundamental case remains strong and suggests that existing shareholders should hold onto their investments as operational execution supports earnings growth. However, new investors should wait for the valuation to correct reasonably before making new investments. From current valuation levels, future shareholder returns are expected to come from earnings growth as backlog converts into revenue, rather than from further multiple expansion.

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