RTX rises 4% after Jefferies upgrade; target $220

RTX shares rose about 4% on Thursday after Jefferies upgraded the aerospace and defense company to Buy from Hold and raised its price target to $220. The stock reached an intraday high of $180.42 following the upgrade.

Jefferies analyst Sheila Kahyaoglu cited improving profit margins, growth in the commercial aerospace engine aftermarket and strength in the defense business when she raised 2026–2028 EPS estimates by roughly 5% on average. Kahyaoglu projected RTX could earn $10.45 per share by 2028, above the current Wall Street consensus of $8.40, according to FactSet.

The firm pointed to operational improvements at Collins Aerospace, pricing gains in Pratt & Whitney original equipment and returns from the geared turbofan aftermarket as sources of higher profitability. RTX reported an operating profit margin near 11.5% in 2025; Jefferies expects margins to expand to about 14%–15% by 2028 as commercial operations improve and the company continues share repurchases.

On defense, Jefferies estimated roughly three-quarters of RTX’s Raytheon business is tied to sensors and effectors, a market the brokerage projects will grow at about an 8% compound annual rate through 2030. The firm said the defense segment could reach operating margins in the mid-teens, supported by U.S. defense spending and international demand.

Contracts cited by Jefferies include a $1.02 billion award to supply NASAMS fire units to Kuwait under the U.S. fiscal 2026 Foreign Military Sales program, a $515 million U.S. Navy contract for SPY-6 radars including upgrades for Flight IIA destroyers, and a phase two DARPA award for the Burn n’ Go advanced rocket motor program with Northrop Grumman. Jefferies also noted work at RTX’s BBN Technologies on a self-healing communications system funded by the Air Force Research Laboratory.

Jefferies valued RTX at about 18.5 times projected 2027 EBITDA and estimated a 3.6% free cash flow yield. The firm projected more than $9 billion in discretionary free cash flow over the next three years. S&P Global Ratings affirmed RTX’s BBB+ issuer credit rating and revised its outlook to positive from stable. About 74% of analysts covering RTX rate the shares a Buy. RTX has paid dividends for 56 consecutive years and yields about 1.69%.