Analysts at TD Cowen revealed their optimism for RTX Corporation (NYSE:RTX) on May 24, increasing the price target from $142 to $155 while keeping a Buy rating.
The analysts cited RTX’s low relative valuation and potential for margin growth at its RTN and P&W divisions as crucial aspects strengthening the company’s position.
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According to RTX’s Q1 earnings call, the company’s “net” tariff EBIT headwind for 2025 is projected to be $850 million, with a 15% higher impact on FCF, coming in at roughly $1 billion. Since tariffs are collected on fresh inventory far in advance of sales and duty drawbacks, TD Cowen analysts anticipate a sizable tariff-related cash headwind of more than $400 million in the second quarter compared to the following quarters.
The analysts did note, however, that the Trump administration’s recent tariff cuts might alleviate the company’s expected $850 million EBIT headwinds.
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