RTX Outperforms Industry Over the Past 3 Months: What Should You Do?

Shares of RTX Corporation RTX have surged 15.1% in the past three months, outperforming both the Zacks Aerospace-Defense industry’s growth of 3.7% and the broader Zacks Aerospace sector’s gain of 3%. It also came above the S&P 500’s return of 7.7% in the same time frame.

Other industry players, such as Huntington Ingalls Industries HII and General Dynamics GD, have also delivered a similar stellar performance in the past three months. Shares of HII and GD have risen 18.9% and 11.3%, respectively, in the said period.

With RTX’s strong recent gains, some investors may want to buy the stock quickly. However, it’s important to check if the company’s fundamentals can support long-term growth or if the rise is only short-term. Understanding RTX’s growth outlook and risks is key to making an informed decision.

Tailwinds for RTX

RTX’s share gains over the past three months seem to be supported by its strong quarterly results, strategic collaborations and some notable contract wins, which together contributed to investors’ optimism. The company released its third-quarter 2025 results in October, wherein it reported solid revenue growth of 11.9%. The bottom line also improved 17.2% from the year-ago quarter.

In November 2025, RTX signed a Memorandum of Understanding to help Avio establish a state-of-the-art solid rocket motor  facility in the United States, serving Raytheon and other customers as a vertically integrated merchant supplier.

In the same month, RTX’s Raytheon business received a contract to support the UK’s Space Domain Awareness mission. The UK Space Agency will use Raytheon UK's NORSSTrack software to map and track satellites, monitor debris and re-entries, and improve orbital analysis and decision making.

Moreover, in October, the company delivered its first PhantomStrike radar to Korea Aerospace Industries (“KAI”) for the latter’s FA-50 Light Combat Aircraft fleet.

For defense contractors like RTX, a steady flow of contract wins from the Pentagon and U.S. allies for its combat-proven defense products, such as the most recent awards, serves as a major growth catalyst.

RTX’s Estimates

The Zacks Consensus Estimate for RTX’s 2025 sales implies year-over-year growth of 7.8%, while that for 2026 sales indicates an improvement of 6.4%. The consensus estimate for its 2025 and 2026 earnings implies year-over-year growth of 7.9% and 9%, respectively.

Further, the upward revision in its 2025 and 2026 earnings over the past 60 days suggests investors’ increasing confidence in this stock’s earnings generation capabilities.

Valuation

In terms of valuation, RTX’s forward 12-month price-to-earnings (P/E) is 26.91X, a discount to the industry average of 28.93X. This suggests that investors will be paying a lower price than the company's expected earnings growth compared with its industry average.

HII and GD are trading at a discount in comparison with RTX. HII’s forward 12-month price-to-earnings is 19.02X, while GD’s forward 12-month price-to-earnings is 20.62X.

Risks to Take Note of Before Choosing RTX

As a key player in the commercial aerospace market, RTX continues to face supply-chain challenges such as part shortages, inflation and labor constraints, which are increasing costs and delaying deliveries. The International Air Transport Association’s June 2025 outlook noted that aircraft deliveries are 30% below peak levels, while order backlogs have risen to about 17,000, leaving airlines short of nearly 5,400 planes.

With production at around 2,000 aircraft a year, clearing this backlog could take three to five years, possibly delaying RTX’s revenues from jet engine sales.

In addition, new U.S. executive orders issued in February 2025 imposed tariffs on imports, leading to retaliatory measures from China, the EU and Canada. These trade tensions could impact global business and affect defense companies like RTX, HII and GD, which have large international exposure.

Should You Buy RTX Stock Now?

Given RTX’s discounted valuation and rising earnings estimates, the stock appears reasonably valued with steady growth potential. However, ongoing supply-chain issues and global trade uncertainties pose near-term risks that could affect performance. Existing shareholders may consider holding the stock, while new investors might prefer to wait for clearer signs of stability before taking a position.

RTX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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