Vertical Research Partners has increased its price target for RTX Corp. to $227.00, up from $219.00, while maintaining a Buy rating in the wake of the company’s fourth-quarter results. The firm’s move reflects a combination of revised earnings and cash flow projections and a slightly higher target multiple applied to calendar year 2027 metrics.
RTX shares are trading at $201.28, close to their 52-week high of $203.03, after delivering a 58% return over the past year. According to InvestingPro data, the stock appears to be trading above its Fair Value.
Vertical Research noted that RTX’s initial guidance for 2026 is largely in line with consensus estimates but described management’s outlook as conservative. The research team expressed specific doubts about the company’s expectation for a moderated aftermarket growth rate at Pratt & Whitney, suggesting the business could outperform that portion of guidance.
Beyond aerospace aftermarket considerations, Vertical Research pointed to RTX’s defense segment as a meaningful complement to aerospace growth in 2026, highlighting what it called a "best in class export exposure" as a positive attribute that supports the company’s revenue mix.
On the earnings front, the firm adjusted its 2026 adjusted EPS forecast upward from $6.68 to $6.79 and raised its 2027 estimate from $7.38 to $7.50. For context, RTX reported diluted EPS of $4.87 for the last twelve months, and analysts project $6.27 for fiscal 2025.
Free cash flow expectations were an important driver of the new target. Vertical Research projects free cash flow of $8.7 billion for RTX in 2026, increasing to $9.8 billion in 2027. Those cash flow projections contributed materially to the firm’s decision to raise its price target.
The $227 target also reflects an increase in Vertical Research’s blended target multiple from 30x to 31x, applied to calendar year 2027 price-to-earnings and price-to-free-cash-flow measures.
RTX’s most recent quarter reinforced the bullish analyst reaction. In fourth-quarter 2025 results, the company reported earnings per share of $1.55, ahead of the $1.47 analysts had expected, and revenue of $24.2 billion versus forecasts of $22.69 billion. Those results prompted other analysts to revisit their outlooks as well.
TD Cowen, responding to the quarterly outperformance, raised its price target to $225 from $210 while keeping a Buy rating. Together, these analyst actions underscore a period of heightened confidence among some sell-side firms following robust quarterly results and the company’s cash flow trajectory.
Analysis
Vertical Research’s decision to both lift EPS estimates modestly and increase the blended multiple signals a greater willingness to incorporate stronger cash generation into valuation assumptions. The firm’s skepticism about Pratt & Whitney aftermarket deceleration is notable because it suggests upside risk to the company’s guidance if aftermarket performance proves stronger than management expects. At the same time, the firm’s emphasis on export exposure in defense highlights the role of international markets in supporting RTX’s growth profile in 2026.
Investors will likely watch upcoming guidance updates and quarterly progress against the free cash flow trajectory cited by Vertical Research, as those metrics played a central role in the revised target.