Investing.com -- UBS upgraded RTX Corporation to "Buy" from "Neutral" noting international defense growth, Collins Aerospace margin recovery, and improvements in Pratt&Whitney’s GTF engine program as key earnings drivers.
The bank noted that international defense now accounts for 44% of Raytheon (NYSE:RTN)'s backlog, up from 32% in 2021, with potential upside if NATO defense spending reaches 3% or more of GDP.
Collins Aerospace is expected to benefit from recovering interiors, modifications, and upgrades, supporting a margin rebound.
UBS also sees the number of grounded GTF-powered aircraft declining in 2025 as maintenance capacity expands and more spare engines become available. It forecasts RTX to resume share buybacks earlier than expected, with $1.5 billion in repurchases projected for 2025.
The price target was raised to $147 from $142, with UBS expecting RTX’s valuation discount to peers to narrow over time.
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