RTX heads into its July 21 Q2 earnings report down 1.2% on the week to $193.51, with options traders maintaining a defensive lean that has now persisted through three consecutive weeks of coverage — though the intensity of that hedging has eased from its peak.
The put/call ratio has settled at 0.87, marginally above its 20-day average of 0.86 and less than a quarter of a standard deviation elevated. That's a meaningful step down from the 52-week high of 0.92 hit in early July, when protective demand was running nearly 1.5 standard deviations above normal. The direction of travel is toward neutrality — but hedgers have not fully stood down as the stock has retreated roughly 4% from its recent highs near $201. The borrow market remains entirely uninformative: over a billion shares sit available to lend against a short base of just 1.25% of free float, and cost to borrow at 0.38% is too low to carry any signal despite a 24% rise over the week.
The Street remains constructively positioned ahead of the number, though the consensus has been reshaped by a cluster of target cuts following Q1 results. Morgan Stanley and UBS both trimmed targets after the April print — the former to $220 from $235, the latter to $199 from $209 — while keeping their ratings intact. More recently, Jefferies upgraded RTX to Buy in early June, lifting its target to $220, which has helped nudge the mean target back toward $215. At current prices, that implies roughly 11% upside. Bulls point to durable demand across Collins Aerospace and Pratt & Whitney, solid execution on synergies from the UTC-Raytheon combination, and a defense spending backdrop that remains supportive. Bears focus on the residual integration complexity, aviation cyclicality, and stretched multiples — the stock trades around 26.7x trailing earnings and 17.8x EV/EBITDA.
Peers have broadly moved in the same direction this week. NOC fell 2.6%, LHX dropped 1.9%, and LOAR shed nearly 5% — suggesting the mild RTX pullback reflects sector-wide softness rather than any stock-specific anxiety. LMT was the relative outperformer, down less than 1%.
The print will test whether RTX's commercial aviation recovery and defense backlog can justify the valuation premium the stock commands relative to peers, particularly after the April quarter's sharp sell-off — and whether the options market's lingering caution had fundamental merit or was simply pre-earnings noise that clears quickly.
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