QS Research · Michael Burry's Scion Capital analyst template · 2006
RTX Corp (RTX)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: PASS
Conviction low · base case -9% · downside -24% · upside +6%
RTX is a scaled aerospace/defense franchise with a record $340B backlog, but the market is already paying 30.4x TTM P/E and 18.1x EV/EBITDA, a premium to NOC/LMT/GD, for Q3 2026 adjusted EPS that included $0.25 of IEEPA recovery and for FCF that fell 47% y/y. Using the Section 13 TTM base of $15.68B EBITDA, $37.17B debt, $9.88B cash and 1,349.44M shares, the 16.6x midpoint of the 14.1x-19.1x peer range gives $172.7/share (-8.9%); 14.1x gives $143.6 (-24.2%) and 19.1x gives $201.7 (+6.4%). At today's 18.1x the same math gives about $190.1 (+0.3%), so even the market multiple leaves no upside and the 16.6x base case is below the price. The base case is neither +30% nor -30%, so the rule says not long and not short; with no margin of safety in a high-quality but premium-priced name, I pass.
Key numbers
- Share price: $189.53
- Market cap: $255.76B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $95.99B
- EV / EBITDA (TTM): 18.1x
- P/E (TTM): 30.4x
- Price / book: 3.69x
The 15 boxes
- ✓ 1. Long-form business notes
RTX is an aerospace and defense company organized into three segments in the FY2025 10-K — Collins Aerospace (avionics, interiors, landing systems and aftermarket), Pratt & Whitney (large and small engines, GTF and F135 military programs, plus MRO) and Raytheon (missiles, air/missile defense, sensors, space) — versus four segments in the FY2020 10-K, when Raytheon Intelligence & Space and Raytheon Missiles & Defense were separate. Scale has grown every year in the DATA window: revenue $64.39B (FY2021) to $88.60B (FY2025), with FY2025 operating income $9.30B, net income $6.73B and operating cash flow $10.57B against capex of only $2.63B. The revenue base is split roughly 38% U.S. government / 47% international in FY2025, backed by $268B of backlog at 12/31/2025, and both aerospace segments depend on a handful of airframers (Boeing + Airbus 16% of Collins sales, Airbus 29% of Pratt & Whitney sales in FY2025).
- ✓ 2. Competitive advantage
The 10-K gives no evidence of a durable pricing advantage: RTX states that all of its businesses are subject to significant competition, that many competitors have substantial financial resources and technological capabilities, and its own disclosure concedes customers can buy spare parts from non-OEM suppliers and that rivals use discounts, performance and operating-cost guarantees and financing to win aftermarket work. What the sources do support is scale and regulatory/qualification barriers in aerospace (competitors must obtain regulatory agency approval to make products and spare parts) plus an installed base in which engine and component selection drives later parts and services revenue. The record shows operating income rising from $5.14B in FY2021 to $9.30B in FY2025 on revenue of $88.60B, with FY2025 operating cash flow of $10.57B against capex of $2.63B, but the sources contain no margin, ROIC or market-share data, so any pricing power cannot be quantified.
- ✓ 3. 10-Q takeaways
Q3 2026 sales rose to $24,965M from $22,478M, with organic growth of $2,611M and all three segments up; nine-month sales were $71,749M vs $64,365M. Q3 2026 operating profit was $3,337M at a 13.4% margin vs $2,523M at 11.2%, helped by $0.4B tariff refunds and $0.2B investment gains and hurt by a $0.4B Pratt & Whitney customer-bankruptcy charge. Net income attributable to common shareowners was $2,583M and diluted EPS $1.89 vs $1,918M and $1.41, with the quarter carrying acquisition-accounting, tariff-refund, bankruptcy and investment-gain items. The 10-Q excerpt gives no inventory, cash-flow, buyback or formal guidance figures.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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