RTX
RTX Corporation
Industrials · Aerospace & Defense · United States · Stock
Theme Exposure
Score Breakdown
Scored for Speculative Opportunities profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The combination of strong revenue growth (+9.7%) and sharply accelerating net income (+41.0%) in FY2025, alongside sustained quarterly operating income near its highs, drove high scores in the growth and momentum factors.
- A conservative debt-to-equity ratio of 0.53 and a consistent multi-year dividend growth track record contributed positively to the financial health and dividend factors, supporting the mid-range composite score of 62.5/100.
- Alignment with the Defense Spending and Space Economy macro themes adds thematic relevance, though the theme factor scored modestly under the model's current methodology, keeping the overall score from reaching the higher tier.
Why Not Higher
- Profitability ratios — a net margin of 7.6%, operating margin of 10.5%, and return on assets of 3.9% — are constrained by the asset-heavy defense and aerospace business model, which weighed on the profitability factor and the composite score.
- The dividend payout ratio of 53.1% and the relatively low theme sub-score both limited upside in their respective factors, preventing the composite from reaching a higher level despite strong growth and momentum signals.
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2024's $80,738,000,000 to FY2025's $88,603,000,000, a gain of +9.7%. Net income expanded from FY2024's $4,774,000,000 to FY2025's $6,732,000,000 (+41.0%), while diluted EPS rose from FY2024's $3.55 to FY2025's $4.96 (+39.7%).
The model rewarded the combination of solid top-line growth and sharply accelerating bottom-line expansion; the outsized earnings and EPS gains relative to revenue growth suggest meaningful margin improvement, which the model weighted favorably but not at the maximum level.
In FY2025, RTX posted a net margin of 7.6%, an operating margin of 10.5%, and a return on assets of 3.9%.
While the operating margin indicates a functional core business, the relatively modest net margin and low return on assets suggest that the asset-heavy nature of the defense and aerospace industry constrains profitability ratios, leading the model to assign a below-midpoint score.
In FY2025, RTX carried a debt-to-equity ratio of 0.53 against total assets of $171,079,000,000.
A debt-to-equity ratio of 0.53 in FY2025 indicates a relatively conservative leverage profile for a large industrial company, which the model rewarded; the substantial total asset base of $171,079,000,000 reflects the scale of the enterprise, though data gaps on other health metrics likely prevented a higher score.
Operating income showed a clear upward trend across four consecutive quarters: $2,146,000,000 in 2025Q2, $2,523,000,000 in 2025Q3, $2,596,000,000 in 2025Q4, and $2,555,000,000 in 2026Q1. Net income similarly climbed from $1,657,000,000 in 2025Q2 to $2,059,000,000 in 2026Q1, with revenue peaking at $24,238,000,000 in 2025Q4 before settling at $22,076,000,000 in 2026Q1.
The model rewarded the sustained elevation of both operating and net income across the trailing four quarters; despite a modest revenue pullback in 2026Q1, profitability metrics held near their highs, signaling durable operational momentum that the model scored near the top of the range.
RTX has grown its dividends per share every year from FY2022's $2.16 to FY2023's $2.32, FY2024's $2.48, and FY2025's $2.67. The dividend payout ratio in FY2025 stood at 53.1% of net income.
The consistent annual dividend increases demonstrate a reliable income track record, which the model rewarded; however, a payout ratio of 53.1% in FY2025 signals that a meaningful share of earnings is committed to dividends, which may limit the score relative to companies with more room for dividend growth or lower payout obligations.
RTX is assigned to the macro themes of Defense Spending and Space Economy.
Although RTX is aligned with two actively tracked macro themes, the assignment did not fully translate into a high theme score under the model's current methodology; the low sub-score likely reflects how the model weighted theme exposure at this time rather than any absence of thematic relevance.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
RTX Corporation posted strong FY2025 results, with revenue rising to $88,603,000,000 (+9.7% year-over-year) and net income expanding sharply to $6,732,000,000 (+41.0%), reflecting meaningful margin improvement on top of solid top-line growth. Quarterly momentum has been durable, with operating income holding near its highs across the trailing four quarters even as revenue moderated slightly in 2026Q1. The company maintains a conservative leverage profile with a debt-to-equity ratio of 0.53 and a consistent dividend growth track record, though profitability ratios remain constrained by the asset-heavy nature of the defense and aerospace industry. RTX earns a composite score of 62.5/100, a Medium risk rating, and is labeled a Research Candidate aligned with the Defense Spending and Space Economy macro themes.
Plain English
RTX is a large defense and aerospace company that grew its revenues and profits strongly in 2025, keeps its debt relatively low, and has been steadily raising its dividend every year — but its profit margins are modest for its size, which keeps its overall score in the middle of the range.
Bull Case vs. Bear Case
Bull Case
- Net income surged from $4,774,000,000 in FY2024 to $6,732,000,000 in FY2025 (+41.0%), and diluted EPS rose from $3.55 to $4.96 (+39.7%), demonstrating that earnings are growing far faster than revenues and signaling meaningful margin expansion.
- Operating income held near its highs across four consecutive quarters — reaching $2,596,000,000 in 2025Q4 and remaining elevated at $2,555,000,000 in 2026Q1 — indicating durable operational momentum rather than a one-time earnings spike.
- RTX has grown dividends per share every year from $2.16 in FY2022 to $2.67 in FY2025, and its debt-to-equity ratio of 0.53 reflects a conservative balance sheet for a large industrial enterprise, supporting financial stability.
Bear Case
- Despite strong earnings growth, RTX's net margin of 7.6% and return on assets of 3.9% in FY2025 remain modest, reflecting the asset-heavy nature of the defense and aerospace industry and limiting the profitability score.
- A dividend payout ratio of 53.1% in FY2025 means a meaningful share of earnings is already committed to dividends, which may constrain the company's flexibility to accelerate dividend growth or redeploy capital.
- Revenue dipped from a peak of $24,238,000,000 in 2025Q4 to $22,076,000,000 in 2026Q1, introducing some uncertainty about whether the top-line trajectory can sustain its recent pace.
What Could Change the Picture
Bullish Triggers
- A sustained expansion of net margins beyond the current 7.6% — building on the already outsized earnings growth relative to revenue — would signal that operational leverage is compounding and could lift the profitability score materially.
- Continued quarterly operating income at or above the $2,500,000,000+ range, combined with a return to revenue growth in subsequent quarters, would reinforce the durability of the momentum already observed.
Bearish Triggers
- A reversal in the quarterly operating income trend — which has held near its highs across 2025Q2 through 2026Q1 — would undermine the primary momentum thesis and raise questions about whether FY2025 margin gains are sustainable.
- A significant increase in the debt-to-equity ratio from its current 0.53 level, or a reduction in dividend growth, could erode two of the key pillars supporting the current composite assessment.
Risk Profile
Medium RiskRTX's debt-to-equity ratio of 0.53 against a total asset base of $171,079,000,000 suggests a manageable leverage profile, reducing near-term financial distress risk. However, the modest return on assets of 3.9% and the slight revenue pullback in 2026Q1 from the 2025Q4 peak indicate that the asset-intensive business model and potential revenue variability warrant ongoing monitoring.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.