RTX has shaken off last week's drift, rallying 4.2% to $181.56 as a fresh analyst upgrade and broad defense sector strength combine to put the bulls back in charge heading into Q2 results on July 21.
The most notable development this week is a clear shift in analyst sentiment. Jefferies upgraded RTX to Buy from Hold on June 4, lifting its target to $220 — a reversal from the same firm's April target cut to $210. That's a meaningful signal given Jefferies analyst Sheila Kahyaoglu covers the aerospace and defense sector closely. Morgan Stanley kept its Overweight rating through post-Q1 target cuts in late April, and JPMorgan retained Overweight into earnings. The consensus now sits at 11 buys and 7 holds, with a mean target of $215.72 — roughly 19% above the current price. Bulls point to Pratt & Whitney's commercial aftermarket momentum, where engine service demand continues to run ahead of expectations. Bears flag the loss-making economics on new GTF engine deliveries and lingering defense procurement delays. The stock's P/E has nudged up to 25.2x and EV/EBITDA to 17x — both higher on the week as the price moved — but neither multiple looks stretched for a franchise with 9% organic revenue growth. The analyst recommendation divergence factor score ranks in the 98th percentile of the universe, confirming the Street's unusually uniform bullish lean.
The lending market remains completely untroubled by the rally. Short interest is just 1.25% of the free float — low in absolute terms, though worth noting it has risen 21% over the past month from roughly 13.4 million shares to 16.7 million. That monthly build is real, but at this level it registers as noise rather than conviction. Availability is effectively unconstrained, with over 900 million shares available to borrow. Cost to borrow jumped 73% on the week to 0.38% — still extraordinarily cheap and likely reflecting the short position rebuild rather than any squeeze dynamic. The borrow market is telling the same story as the options market: no material bear conviction here. The put/call ratio eased to 0.72, roughly in line with its 20-day average of 0.70 and a full standard deviation below the defensive spike to 0.85 seen earlier this week. That's a notable shift from the prior note's observation of building hedging demand — options traders have stepped back from the cautious positioning that preceded the April sell-off.
Defense sector peers broadly moved in the same direction, though RTX's weekly gain outpaced most. NOC added 2.3% and LMT rose 3.3%, while LHX was essentially flat on the week despite a 2% single-day gain. The group cohesion suggests a procurement-environment tailwind rather than RTX-specific re-rating, though the Jefferies upgrade gives RTX a name-specific catalyst that its peers lacked this week.
The prior note flagged that the PCR near 0.82 preceded the April 21 earnings sell-off, when RTX fell 7.6% on the day and 10.3% over the following five sessions. The current PCR of 0.72 is considerably calmer, and the stock is now trading well below the $204-$205 range where CEO Christopher Calio and CFO Neil Mitchill sold sizeable blocks in February — a gap that removes some of the overhang that surrounded those insider disposals. With Q2 results scheduled for July 21, the next month will increasingly focus on whether Pratt & Whitney's aftermarket trajectory holds, and whether the new GTF delivery economics show any improvement from the roughly $1 million per-unit loss flagged in the bear case.
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