The case for RTX (RTX) starts with a roughly $289 billion backlog as of June 2026. The read-through is not clean: more than half of those orders belong to Collins Aerospace and Pratt & Whitney, two divisions that track commercial aviation closely, and the Iran conflict has pushed fuel prices sharply higher at exactly the wrong moment for airline operators.
RTX Chairman and CEO Chris Calio highlighted the backlog at Morgan Stanley's annual Laguna Conference and made a point of noting what the number excludes. The $289 billion does not count five major munitions framework agreements or a recently awarded seven-year, $22.9 billion U.S. Navy Tomahawk missile contract, so the visible order pile already understates the total pipeline. Within the reported figure, $170 billion comes from commercial customers and $119 billion from defense. Raytheon's share of the backlog is now 48% international, up four percentage points from a year earlier.
The second-quarter results, published July 23, offered corroborating evidence. Revenue rose 14.5% year over year to $24.7 billion, beating expectations; organic sales climbed 16%. Adjusted earnings per share came in at $1.89, up 21.1% from a year earlier. Free cash flow reached nearly $2.9 billion for the quarter, against negative $72 million in the same period a year ago. RTX subsequently raised its 2026 outlook, targeting adjusted sales of $95 billion to $96 billion and free cash flow of $8.50 billion to $8.75 billion, per the company's own guidance.
The counterargument deserves the space. Collins Aerospace and Pratt & Whitney together account for the majority of the backlog, and Calio's medium-term target of 19% to 20% operating margins at Collins depends on airlines continuing to demand fuel-efficient aircraft and aftermarket services. The risk is that sustained higher fuel prices push carriers to defer upgrades rather than accelerate them, slowing conversion on the commercial side of the order book before the defense business can absorb the gap.
On balance, what's changed this year is that the defense side is running hard. Raytheon posted 18% sales growth to $8.3 billion in the second quarter, driven by Patriot, Standard Missile, and AMRAAM programs, and secured nearly $20 billion in new awards during the quarter alone. Analysts covering RTX project full-year 2026 adjusted EPS of approximately $7.22, up an estimated 14.8% year over year, with the average price target sitting at $231.83, implying 18.6% upside from recent levels.