RTX Loads Up on Contracts, Is Ready to Aim Higher

It's the time of the year when we see, almost on a daily basis, large defense contractors landing new or extended contract awards from the Department of Defense and allied clients. Lockheed Martin  (LMT)  landed a $3.63 billion contract modification from the Navy's Naval Air Systems Command on Friday to support already delivered F-35 Lightning II fighter aircraft. Though the Navy was the contracting agency, this program will support Air Force-based F-35s as well as those serving in Navy and Marine Corps aviation units. Northrop Grumman  (NOC)  has landed several much smaller contracts going back to early last week.

That said, one defense contractor's name has been popping up on my screen on almost a daily basis of late. Last Thursday, RTX Corporation  (RTX) , which is the former Raytheon Technologies, landed a $182 million contract with the Army. On Friday, RTX landed a $512 million Army contract to develop and provide support for the Army's Synthetic Aperture Radar/Moving Target Indicator Radar, while also landing an Air Force contract, with no easily found dollar amount attached, to provide Phantom Strike radars to in-flight simulation test aircraft.

Then came Monday: RTX was awarded an $842 million Army contract modification for fire units to include hardware, software and services inherent to production. The modification brings the face value of the total contract up to $1.72 billion. We're not done. This morning, RTX was awarded an additional $1.7 billion contract to supply Spain's armed forces with four Patriot air and missile defense systems. That deal will include all radars, launchers, command and control stations and required training.

Earnings

RTX is set to report fiscal fourth quarter financial results on Jan. 21, so in a little less than a month. RTX's fiscal quarter and year correlate precisely to the calendar year. Hence, these contracts and contract modifications might not be full priced in with the period ending next week.

Right now, Wall Street is looking for an adjusted EPS of $1.47 on revenue of roughly $22.7 billion. That would be down in comparison to $1.57 for the year-ago comp on year-over-year revenue growth approaching 4.8%. Do these orders change some estimates? Maybe. Thirteen of the 16 sell-side analysts that I know that cover RTX had revised their Q4 numbers lower, yet this is the only one of the large defense contractors currently undergoing a clear technical breakout.

Remember, in October, RTX confirmed its projection for full-year free cash flow of at least $7 billion, while sharply increasing guidance for both sales and adjusted profitability. let's take a look at that chart, shall we?

The Chart​

Readers will see that RTX went into a more than two-month basing period of consolidation late in 2025 after rallying sharply out of a double bottom pattern of bullish reversal this past April. 

The base runs with an upside pivot of $181. If I have any concern at this point, it is the fact that the unfilled gap created this past October remains unfilled. The selloff ​in early December did not completely plug that hole. As we know, unfilled gaps don't have to be filled, but they usually do get there.

Back to the present, relative strength is quite robust without entering into technically overbought territory. In addition, the daily moving average convergence divergence is set up about as bullishly as bullish gets. The histogram of the 9-day exponential moving average is now well above the zero-bound, as are both the 12-day EMA and the 26-day EMA. On top of that, the 12-day line is running well above the 26-day line. These are all short to medium-term bullish signals.

Target Price: $217 (current Street-high)

Pivot: $181

Add: down to gap fill ($162)

Panic: loss of 200-day SMA (currently: $152)

At the time of publication, Guilfoyle was long RTX equity.