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RTX Corporation arrives at its October 20 earnings date in a materially different position than the one described in notes filed just days ago: the stock has recovered sharply, gaining nearly 6% over the past week to close at $193.92, reversing much of the slide that had pushed it toward $183. That bounce changes the tone of the setup considerably, even as the analyst community moved in the opposite direction on the same day.
The most notable development heading into Monday's print is a cluster of target cuts filed on October 15. RBC Capital's Ken Herbert lowered his target from $250 to $235, maintaining Outperform. Bernstein trimmed again, from $223 to $214, holding Market Perform. Both moves arrive after a previous note on October 7 noted targets of $240 and $223 respectively, meaning both firms have now cut twice in roughly three weeks. The direction of travel is clear: the Street still sees upside from the $193.92 close (the consensus mean target is $227.78, implying around 17% to the mean), but analysts are pulling back their goalposts even as the stock recovers. Barclays initiated coverage on October 9 with an Overweight and a $223 target, adding a fresh constructive voice to the mix. The analyst recommendation differential ranks in the 98th percentile of the ORTEX universe, so the bull camp remains unusually well-populated despite the trim cycle.
The bull case rests on RTX's Q2 performance: 14% organic sales growth, a 14% EPS beat, and a backlog that reached $289 billion, up 22% year-on-year. Raytheon's 18% organic expansion and $20 billion in awards underpin the defense side, while Collins Aerospace and Pratt and Whitney provide commercial aerospace upside. Bears point to Pratt and Whitney's GTF engine issues, supply chain bottlenecks in rocket motors and microelectronics, and the risk that free cash flow comes in closer to a $10 billion downside scenario than the bull case warrants. Tariff headwinds and slower-than-expected commercial aerospace recovery are the secondary concerns. The Q3 print is the first major test of whether the Q2 momentum held through the summer.
Options positioning has eased slightly from the elevated readings seen earlier in October. The put/call ratio is now 0.86, running about 0.9 standard deviations above its 20-day average of 0.82. That is a more moderate reading than the 0.88 to 0.91 range seen last week: the defensive hedging that built through early October has not disappeared, but it is no longer intensifying. Short interest, meanwhile, remains low in absolute terms at just over 1% of the free float, and the lending market is entirely relaxed, with availability effectively uncapped. The cost to borrow, at 0.39%, has actually eased 10% over the past week. No squeeze pressure exists in this name.
The October 20 print will test whether RTX can confirm the Q2 trajectory across all three segments, and whether management's raised full-year guidance survives contact with a quarter that carried the GTF and supply chain headwinds that analysts are still discounting.
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