What Happened?

Shares of aerospace and defense company Raytheon (NYSE:RTX) fell 10.3% in the afternoon session after the company reported weak first-quarter 2025 results and gave underwhelming guidance. The 2025 forecast for adjusted EPS implies modest growth, and the company's organic sales guidance of 4% to 6% was a touch light compared to consensus. On the other hand, RTX beat analysts' organic revenue expectations. Overall, this quarter was mixed. The market appeared to focus on the cautious tone around tariffs and the lack of upward revisions to full-year profit targets, despite solid execution in Q1. 

Separately, competitor Northrop reported weak results and gave underwhelming guidance, raising concerns about the defense sector's ability to hold up amid escalating trade tensions.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy RTX? Access our full analysis report here, it’s free.

What The Market Is Telling Us

RTX’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. Moves this big are rare for RTX and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 9 months ago when the stock gained 10% on the news that the company reported a "beat and raise" quarter. RTX blew past analysts' organic revenue expectations. Its revenue also outperformed Wall Street's estimates. That the company raised full year revenue and EPS expectations was icing on the cake. Overall, we think this was a really good quarter that should please shareholders.

RTX is down 1.9% since the beginning of the year, and at $113.75 per share, it is trading 16.2% below its 52-week high of $135.66 from March 2025. Investors who bought $1,000 worth of RTX’s shares 5 years ago would now be looking at an investment worth $1,793.

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