RTX Corporation has positioned itself at the intersection of escalating global defense imperatives and the recovery of commercial aviation, generating a formidable $251 billion backlog that provides unprecedented revenue visibility. The company reported strong Q3 2025 results with sales of $22.5 billion (up 12% year-over-year) and raised its full-year guidance, driven by double-digit organic growth across all segments. This performance reflects RTX's dual-market advantage: surging defense spending, with global military expenditure reaching $2.7 trillion in 2024 and NATO's new 5% GDP target by 2035, combined with recovering commercial aviation demand projected to exceed 12 billion passengers by 2030.
RTX's technological superiority centers on proprietary Gallium Nitride (GaN) semiconductor innovations that power next-generation radar systems, creating substantial barriers to entry. The company's LTAMDS radar delivers twice the power of legacy Patriot systems while eliminating battlefield blind spots, and the newly launched APG-82(V)X radar enhances fighter aircraft capabilities against advanced threats. Major contracts underscore this dominance, including a $5 billion Army award for the Coyote counter-drone system, which extends through 2033. RTX has committed over $600 million to manufacturing expansion this year alone, with the Redstone Missile Integration Facility expansion specifically targeting increased production of Standard Missile variants and counter-hypersonic solutions.
On the commercial side, Pratt & Whitney's GTF Advantage engine achieved EASA certification in Q4 2025, resolving earlier durability challenges with a design targeting double the time-on-wing compared to prior models. This breakthrough secures RTX's control over the A320neo and A220 fleets, guaranteeing decades of high-margin maintenance, repair, and overhaul revenue. Collins Aerospace's global network of over 70 MRO sites and flexible AssetFlex program capitalizes on supply chain constraints that force airlines to invest more heavily in fleet maintenance rather than new aircraft purchases.
The financial trajectory appears compelling: analysts project free cash flow will surge from $5.5 billion in 2023 to $9.9 billion by 2027, representing 15.5% annualized growth and compressing the price-to-FCF multiple from 31.3x to 17.3x. Wall Street maintains a consensus "Buy" rating across thirteen covering firms with zero sell recommendations. RTX's 60,000-patent portfolio, built on $7.5 billion in annual R&D spending, spans advanced materials, AI, autonomy, and next-generation propulsion, creating a self-reinforcing cycle where investment drives proprietary technology that secures long-term government contracts. With an affirmed BBB+ credit rating and stable outlook, RTX presents a structurally sound investment thesis built on geopolitical necessity, technological moats, and expanding cash generation.