RTX Corporation (RTS)

RTX is a mature aerospace and defence company. The company is trading at 20.4x Forward P/E and is expected to grow around 6% organically over the next few years. It has been generating solid cash flow in recent years and is fairly aggressive in its buyback program. We think the valuation is quite fair given the growth prospects and strong track record of repurchasing shares.

The company is trading at a slightly higher valuation relative to competitors, including LMT (19.7x), NOC (18.4x), and GD (17.6x).
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The decline could partially be attributed to news that broke on June 11, that a class action lawsuit was filed against Raytheon (now RTX) alleging that the company discriminates against job seekers who are 40 years or older in favour of recent graduates. RTX denied the allegations, but this could be a contributing factor to the slide. We do not see the lawsuit as overly significant right now and these types of cases generally can take a long time to settle. We do still consider it a good industrials stock and one of the top defense names. 
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Average analyst estimates for Q1 call for sales expected to be $18.4B and EPS is expected to be $1.23. It has beaten estimates in eight straight quarters and we have no reason to expect problems. Guidance could be increased with higher defence spending. We think RTX is one of the top names in the defense sector which could continue to gain traction given the state of geopolitical affairs. RTX's valuation is also decent at 18.6x forward earnings. 
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