RTX Corp. managed to buck the broader market's downward trend on Friday, closing at $180.99, up 0.88%. The aerospace and defense contractor's gain came after a Jefferies analyst upgraded the stock, highlighting strong aftermarket sales, expanding margins, and steady defense demand. In contrast, the S&P 500 fell 2.64%, the Nasdaq dropped 4.18%, and the Dow Jones Industrial Average lost 1.35%, as a stronger-than-expected May jobs report reignited fears that the Federal Reserve might maintain or even tighten its monetary policy. Higher interest rates tend to reduce the present value of stocks that rely on future earnings growth, a factor that weighed heavily on technology shares.
RTX's resilience stemmed from its diversified business model, which spans missiles, radars, aircraft engines, and airline maintenance services. This mix provides a different earnings profile compared to the tech stocks that led the selloff. Jefferies analyst Sheila Kahyaoglu raised her rating on RTX to Buy from Hold and increased her price target to $220 from $210, citing improved commercial aerospace engine aftermarket sales, wider margins, and consistent defense demand. "RTX is home to leading franchises across Aerospace and Defense," Kahyaoglu said, according to Barron's.
The stock had already surged 3.98% on Thursday following the upgrade, erasing earlier weekly losses. By Friday's close, RTX was above its May 29 close of $179.66, marking a modest weekly gain of about 0.7%. Among peers, General Dynamics added 1.45% and Lockheed Martin rose 0.91%, while Boeing fell 0.91%, reflecting the divergence between defense-oriented names and commercial aviation companies pressured by rising fuel costs and delivery delays.
RTX's fundamentals remain solid. In April, the company raised its 2026 forecast after reporting first-quarter sales of $22.1 billion, up 9% year-over-year, and adjusted earnings per share of $1.78, a 21% increase. Its backlog stood at $271 billion, with $162 billion from commercial operations and $109 billion from defense. CEO Chris Calio noted that the company is making "significant investments to increase output." Additionally, Raytheon, RTX's defense arm, secured a $515 million U.S. Navy contract for its SPY-6 radar system, with plans to double production by 2028, backed by an $800 million investment in radar manufacturing.
Despite these positives, risks persist. The ongoing conflict in Iran has driven up jet fuel costs, complicating airline planning and directly affecting RTX's Collins Aerospace and Pratt & Whitney units. Willie Walsh, director general of the International Air Transport Association, warned that high fuel prices will be "very difficult to cope with" for some airlines and criticized delays in aircraft and engine deliveries, including those from Pratt & Whitney. Tariffs also pose a challenge: RTX reported paying $500 million related to International Emergency Economic Powers Act tariffs in the first quarter, though it may attempt to recover some of that expense.
Looking ahead, RTX will pay its raised quarterly dividend of 73 cents per share on June 11, a 7.4% increase from the previous quarter, to shareholders of record as of May 22. The company's calendar is relatively quiet next week, but broader market movements could drive RTX's performance. If rate jitters spill over from tech into industrial stocks, RTX may need to emphasize its defense backlog. Conversely, if investors continue to rotate out of crowded tech positions into safer havens, last week's slim gain could prove more significant than it initially appeared.
