Wolfe Research reaffirmed its Outperform rating on RTX Corp (NYSE:RTX) after the company agreed to a framework intended to expand missile production capacity as part of the Pentagon’s push to strengthen defense industrial capability.
Analyst stance and valuation
The research firm maintained its $235.00 price target on RTX stock, citing the framework agreement as a meaningful development. Wolfe noted the arrangement could remove RTX from consideration on any so-called "underperforming defense contractor list" that the Secretary of Defense is expected to produce by February 7.
Projected revenue impact
Wolfe Research estimated the production build-out could yield approximately $7-8 billion in incremental revenue for RTX’s Raytheon segment. The firm characterized that figure as roughly a 25% implied increase compared with the segment’s 2025 run-rate, and said the added production could exert "a couple percent upside pressure" on the 6% compound annual growth rate currently modeled for Raytheon.
Program specifics and funding approach
The framework contemplates a potential tripling of output for the SM-3IB missile program, which Wolfe noted had been under threat of cancellation by the current administration about 12 months ago. The agreement also includes a collaborative funding approach that the research firm described as designed to preserve upfront free cash flow.
Guidance and future investment
RTX has incorporated the framework into its 2026 guidance. Wolfe Research said it expects net incremental investment in 2027 and beyond to be manageable, while acknowledging there remains "some opacity in current production and where unit price points might land."
Related aerospace and defense activity
In related business developments, Raytheon - the RTX division - has entered five framework agreements with the U.S. Department of Defense focused on expanding production capacity for several missile systems. Those agreements are intended to substantially increase annual output of Tomahawk cruise missiles, AMRAAM air-to-air missiles, and Standard Missiles over the next seven years.
Outside of Raytheon, RTX reported additional commercial aerospace wins. Pratt & Whitney was selected by Vietjet Air to supply engines for 44 more Airbus A320neo family jets, with deliveries slated to begin in July 2026. Pratt & Whitney also secured a 15-year maintenance contract with Scoot for auxiliary power units on its Boeing 787 Dreamliner fleet.
Collins Aerospace, another RTX business unit, was chosen by Thai Airways to implement the FOMAX system for the carrier's A321neo aircraft to provide real-time data services. Collins also extended its FlightSense maintenance services agreement with Singapore Airlines to cover additional Boeing 777F freighter aircraft.
What this means for RTX
Taken together, the framework agreements and commercial contract wins underscore RTX’s efforts to expand capacity across both defense and commercial aerospace operations. Wolfe Research’s outlook incorporates the production build-out into near-term guidance while flagging execution and pricing clarity as items to watch going forward.