Jefferies Reiterates Hold Rating on RTX Corp. (RTX)
Jefferies analyst Sheila Kahyaoglu reiterated a Hold rating and $120.00 price target on RTX Corp. (NYSE: RTX)
The analyst comments "Q3:24 Adj. EPS of $1.45 vs our est/cons of $1.24/$1.34. Q3 revs +8% org were 2% above. Adj segment income was $0.10 ahead / 2¢ ahead of consensus. BTL contributed 8¢. 2024 revs guide raised by 0.5% w/ Adj EPS raised 3% or 14¢ to $5.50-5.58 (from $5.35-5.45) vs est/cons of $5.35/$5.47. Pratt and Raytheon segment EBIT raised $0.08 w/ Collins lowered $0.05. BTL adds $0.09 for 2024. FCF unch at $4.7BB. 2024 EPS Guide Raised 3% to $5.50-5.58. RTX raised 2024 adj EPS guidance by 3% to $5.50-5.58 from $5.35-5.45 vs. our est/cons of $5.35/$5.47. Sales are up ~8-9% org at $79.25-79.75BB (guide up 0.5% from $78.75-79.5BB) vs our est/cons of $79.1BB/$79.4BB. Collins and Pratt are up HSD (unchanged) and +mid-teens (unchanged) organically, respectively, vs our estimates of +7% and 13% growth. Raytheon up MSD organically (unchanged) vs our forecast of +5% organic y-o-y (flat on a reported basis). Collins profit guidance lowered to +$575-650MM from +$650-725MM EBIT growth, implying margins of 15.9% at the mdpt vs. our 16.1% est. This is a ~29% incremental vs 14.9% margins in 2023 and implies 16.2% in Q4 vs 14.9% YTD. P&W was raised to $475-525MM from +$400-475MM EBIT growth, implying margins of 8.0% at the midpt vs our 7.8% est and 7.6% YTD (implying 9.2% Pratt margin in Q4). Raytheon margins are implied at 10.1% (+$200-250MM) vs our est of 9.7%. Raytheon reported 10.2% YTD, implying 9.8% in Q4. Tax rate was lowered to 18.8% from 19.3% (+4¢) and interest to $1.935BB (vs $1.975BB, +3¢). FAS/CAS was ~$840MM (vs $800MM prior, +2¢) for total BTL of +9¢."
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Shares of RTX Corp. closed at $127.21 yesterday.