RTX Corporation

“RTX owns one of the deepest industrial moats in the US — a self-compounding GTF aftermarket annuity, sole-source defense programs, and near-permanent certification barriers — all widening simultaneously. FCF accelerated sharply to $7.45B in 2025 and the deleveraging path is clear. However, at 24.3x forward earnings and ~3% FCF yield, the market has already priced in the thesis with precision, leaving expected 10-year total returns of roughly 3-4% annually — adequate but not compelling for long-term capital. Management is competent but carries two DOJ DPAs, a ~$950M FCPA settlement, and the GTF manufacturing failure that cost billions in credibility. The business warrants serious attention at ~$145-155 (~16-18x forward), where the margin of safety becomes meaningful and the long-run compounding thesis is genuinely attractive.”