DCF Studio

    RTX · NYQ · Industrials

    RTX Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 74.54

    Market price

    USD 202.79

    Implied upside

    -63.2%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Current EV/EBITDA of 22.4x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 74.54-63.2%
    Exit multiple
    USD 177.47-12.5%
    Market price
    USD 202.79

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn4bn7bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 97.4bnUSD 104.9bnUSD 112.2bnUSD 119.4bnUSD 126.3bnUSD 132.7bnUSD 138.6bnUSD 143.8bnUSD 148.4bnUSD 152.1bn+5.1%
    EBITUSD 7.8bnUSD 8.4bnUSD 9.0bnUSD 9.5bnUSD 10.1bnUSD 10.6bnUSD 11.1bnUSD 11.5bnUSD 11.9bnUSD 12.2bn+5.1%
    NOPATUSD 6.5bnUSD 7.0bnUSD 7.5bnUSD 8.0bnUSD 8.5bnUSD 8.9bnUSD 9.3bnUSD 9.7bnUSD 10.0bnUSD 10.2bn+5.1%
    Add depreciation & amortisationUSD 5.5bnUSD 5.9bnUSD 6.3bnUSD 6.7bnUSD 7.1bnUSD 7.5bnUSD 7.8bnUSD 8.1bnUSD 8.4bnUSD 8.6bn+5.1%
    Less capital expenditureUSD -4.0bnUSD -4.7bnUSD -5.6bnUSD -6.5bnUSD -7.4bnUSD -8.4bnUSD -9.4bnUSD -10.4bnUSD -11.4bnUSD -12.3bn+13.5%
    Capex, % of revenue4.1%4.5%5.0%5.4%5.9%6.3%6.8%7.2%7.7%8.1%-
    Less increase in working capitalUSD -1.2bnUSD -1.1bnUSD -1.0bnUSD -1.0bnUSD -971.8mUSD -911.7mUSD -836.2mUSD -746.2mUSD -642.4mUSD -526.5m-9.2%
    Free cashflow to firmUSD 6.8bnUSD 7.2bnUSD 7.3bnUSD 7.3bnUSD 7.2bnUSD 7.1bnUSD 6.9bnUSD 6.7bnUSD 6.3bnUSD 5.9bn-1.6%
    Discount factor0.96770.90610.84840.79440.74390.69650.65220.61070.57180.5355-
    Present valueUSD 6.6bnUSD 6.5bnUSD 6.2bnUSD 5.8bnUSD 5.4bnUSD 5.0bnUSD 4.5bnUSD 4.1bnUSD 3.6bnUSD 3.2bn-
    Present Value Of The ForecastUSD 50.7bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.519Reported 0.282, pulled toward 1.0 (Blume)
    Cost of equity7.09%Risk-free + beta x equity risk premium
    Cost of debt5.67%Risk-free + 78bp, the spread for a A rating at 5.1x interest cover. Book interest / average debt was lower, at 4.5%.
    Market capitalisationUSD 273.7bn87.4% of capital
    Total debtUSD 39.5bn12.6% of capital, book value as a proxy
    Tax rate16.0%Effective, capped at statutory
    WACC6.80%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 74.54

    62% of EV

    Forecast FCFF, final year
    USD 5.9bn
    Capex at depreciation, working capital in reinvestment
    USD 10.2bn
    Less reinvestment at g/ROIC (36.8% of NOPAT)
    USD -3.8bn
    Capitalised
    USD 6.5bn
    ROIC (WACC floor)
    6.8%
    Terminal value, undiscounted
    USD 154.0bn
    Terminal value, discounted
    USD 82.5bn
    Enterprise value
    USD 133.2bn
    Less net debt
    USD 32.1bn
    Equity value
    USD 101.1bn

    Exit at 20.0x EBITDA

    Value per shareUSD 177.47

    81% of EV

    Terminal value, undiscounted
    USD 414.7bn
    Terminal value, discounted
    USD 222.1bn
    Enterprise value
    USD 272.8bn
    Less net debt
    USD 32.1bn
    Equity value
    USD 240.7bn

    Spread between methods: 82%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.80%121.82120.48119.43118.93119.62
    5.80%95.0593.4291.7990.1688.53
    6.80%77.1775.8574.5473.2371.92
    7.80%63.9162.8361.7560.6759.59
    8.80%53.7052.8051.8950.9950.08

    Outlined: this model. Green text: above today's price of 202.79. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year9.7%5.5%16.7%
    EBIT margin10.5%8.0%18.5%
    Discount rate-6.8%3.9%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.