Analysts at TD Cowen revealed their optimism for RTX Corporation (NYSE:RTX) on May 24, increasing the price target from $142 to $155 while keeping a Buy rating.
The analysts cited RTX's low relative valuation and potential for margin growth at its RTN and P&W divisions as crucial aspects strengthening the company's position.
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According to RTX's Q1 earnings call, the company's “net” tariff EBIT headwind for 2025 is projected to be $850 million, with a 15% higher impact on FCF, coming in at roughly $1 billion. Since tariffs are collected on fresh inventory far in advance of sales and duty drawbacks, TD Cowen analysts anticipate a sizable tariff-related cash headwind of more than $400 million in the second quarter compared to the following quarters.
The analysts did note, however, that the Trump administration's recent tariff cuts might alleviate the company's expected $850 million EBIT headwinds.
While we acknowledge the potential of RTX to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than RTX and that has 100x upside potential, check out our report about the cheapest AI stock.
Read More: 10 Best Magic Formula Stocks for 2025 and 10 Best Retirement Stocks to Buy According to Hedge Funds
Disclosure: None.
