Al Root
RTX stock was rising early Thursday after the Shares of aerospace and defense company got an upgrade.
RBC analyst Ken Herbert upgraded RTX stock to Buy from Hold. His price target went to $140 a share from $130, up almost 25% from recent levels.
RTX stock was up 1.2% at $115.79 in premarket trading while S&P 500 and Dow Jones Industrial Average futures were about 0.4%.
"The RTX defense portfolio is well positioned in Trump 2.0. While RTX does face risk associated with the F-35 [fighter jet]," wrote Herbert.
The F-35 has come under fire from Tesla CEO -- and co-leader of the newly formed Department of Government Efficiency -- Elon Musk, who prefers unmanned aircraft to traditional jet fighters.
The U.S. military, of course, employs both. Herbert believes F-35 build rates will be stable at about 150 a year. RTX makes the engines for the F-35. Lockheed Martin makes the jet.
"RTX is perhaps best positioned relative to peers to benefit from the re-stocking of missiles and missile defense growth," added Herbert. Missiles account for about 30% of RTX defense sales. (Defense business accounts for roughly 40% of the total company backlog.)
Elsewhere in the sector, Herbert downgraded shares of aerospace company General Dynamics to Hold from Buy. His price target went down to $290 from $330 a share, up about 11% from recent levels.
General Dynamics stock was down 0.9% in premarket trading at $260 a share.
Slower business jet deliveries and some uncertainty in the defense business -- for all companies -- under a new administration were cited.
In October, General Dynamics cut its full-year business jet delivery guidance to about 150 planes from 160.
Overall, 57% of analysts covering General Dynamics stock rate shares Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for General Dynamics stock is about $323 a share.
About 44% of analysts covering RTX shares rate them Buy. The average analyst price target is about $137 a share.
Coming into Thursday trading, RTX stock was up 36% so far this year. General Dynamics shares were up about 1%.
Write to Al Root at allen.root@dowjones.com
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(END) Dow Jones Newswires
December 19, 2024 07:58 ET (12:58 GMT)
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