Aging Jets, Rising Threats: Why RTX Corporation (RTX) Just Raised Its 2026 Outlook

RTX Corporation (NYSE:RTX) on Thursday lifted its sales and profit outlook for 2026, amid sustained demand for commercial aircraft maintenance and military systems, as airlines continue to rely on older fleets and governments restock weapons.

The aerospace and defense company now projects adjusted sales in the range of $95 billion to $96 billion, up from its earlier estimates of $92.5 billion to $93.5 billion. Wall Street has an average forecast of $94.08 billion. The full-year adjusted EPS is expected in the range of $7.10 to $7.25, up from $6.70 to $6.90, and above analysts' forecast of $6.92 per share.

The forecast lift came during the second quarter earnings call on July 23, where RTX beat Wall Street's estimates for both revenue and profit. Quarterly revenue came in at $24.7 billion, growing 14% year-over-year, while adjusted EPS was logged at $1.89, representing a 21% increase from the prior year's period.

The Numbers Behind the Beat

The Pratt & Whitney unit, which manufactures engines for Airbus jets and the F-35, saw a 16% increase in sales to $8.89 billion, while demand for air and missile defense systems drove an 18% sales growth in the company's Raytheon defense business. Collins Aerospace, which delivers advanced aviation systems, saw an 8% increase in sales.

The company said its backlog expanded 22% from the prior year's period to $289 billion, which included $170 billion in commercial aerospace and $119 billion in defense-related orders. Operating cash flow during the quarter came in at $3.5 billion, resulting in free cash flow of $2.9 billion.

Aging Jets, Rising Threats

Supply chain constraints and delayed deliveries from Boeing and Airbus have resulted in a shortage of new commercial aircraft, because of which airlines are continuing to spend heavily on maintenance, ​repair, and overhaul (MRO) services.

During the quarter, RTX Corporation (NYSE:RTX)'s Pratt & Whitney business said it was investing over $100 million across three MRO sites in Texas, Florida, and Arkansas.

On the other hand, governments across the world are replenishing their weapons stockpiles, as the war between Russia and Ukraine rages, and conflicts in the Middle East intensify. Rising demand for the company's air and missile defense systems, like Patriot, Standard, and AMRAAM missiles, drove sales growth in its defense business in Q2.

Bull Case

RTX's robust backlog represents promising revenue visibility over the coming years, not just quarters.

The company is also seeing strong demand for both commercial and defense engines, which shall help in negating the impact of cyclicality compared to other pure-play competitors.