Bernstein has increased its price target for RTX Corp. to $204.00 from $189.00, while leaving its rating at Market Perform, citing the particularly strong performance of the Raytheon business. The new target sits near RTX's most recent share price of $199.88; the stock has been trading close to its 52-week high of $205.36 and has delivered a 57.86% return over the past 12 months. According to InvestingPro data, the shares appear slightly overvalued when judged against a Fair Value assessment.
RTX reported fourth-quarter 2025 results on January 28. The company posted adjusted earnings per share of $1.55, ahead of the consensus estimate of $1.47. Adjusted revenue for the quarter came in at $24.24 billion, topping the consensus expectation of $22.63 billion. For the full year, RTX generated $88.6 billion in revenue, a gain of 9.74%, and reported diluted earnings per share of $4.96.
Bernstein analyst Douglas Harned identified Raytheon as "the standout" performer within RTX, noting margins that exceeded estimates and a record backlog that reached $75 billion. Within Raytheon, Harned highlighted that demand for missiles and missile defense solutions now outstrips current production capacity.
The analyst said the Raytheon strategy is focused on expanding capacity for export demand and on the Golden Dome program for mature products, areas expected to carry higher margins. This operational emphasis has, in Bernstein's view, strengthened the trajectory toward achieving margins of 12% or greater for the segment.
Despite the positive trajectory at Raytheon, Bernstein maintained a Market Perform rating on RTX because of continued uncertainty surrounding the outlook for the Pratt & Whitney division. Pratt & Whitney has projected that the present imbalance between jet engine demand and supply will normalize by the end of the decade. The company is working to boost production and expand capacity for aftermarket repairs by 2026.
Separately, Raytheon has landed several important contract awards. The company received a $1.03 billion contract modification from the U.S. Department of War for production of Lower Tier Air and Missile Defense Sensor systems, covering Year Two requirements for the defense-system production. In addition, Raytheon was awarded a $197 million contract from the U.S. Air Force Life Cycle Management Center to deliver the MS-110 Multispectral Reconnaissance System to the Polish Air Force. That contract includes seven reconnaissance pods and accompanying support services; Poland is noted as the first NATO member to procure this technology.
Outside of Bernstein, other major brokerages have also adjusted their price targets for RTX. Morgan Stanley raised its target to $235, citing the company’s strong positioning for growth and potential margin expansion. UBS raised its target to $208, pointing to healthy demand and margin improvement across RTX’s business lines and forecasting free cash flow that exceeds prior expectations.
Context and implications
The most recent results and contract wins underscore divergent business trends inside RTX. Raytheon’s elevated backlog and capacity constraints in missiles and missile defense signal robust defense demand and potential for sustained margin improvement if capacity can be expanded. In contrast, Pratt & Whitney’s timeline to resolve engine demand-supply imbalance and ramp aftermarket repair capacity introduces continued near-term uncertainty.
Bernstein’s move to raise the target while keeping a Market Perform rating reflects the balance between stronger defense segment momentum and persistent operational questions in the commercial aviation engine business.