RTX: A Slow Burn in the War Machine

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RTX Corporation (RTX +2.06%)… the name itself feels like a coded transmission from the Pentagon. This morning, they dropped their 2025 earnings, and the market, predictably, twitched. A 2.1% pop by 9:45 AM ET. Not a supernova, more like a controlled demolition. A flicker of green in a world rapidly turning shades of grey. The war machine doesn’t exactly boom anymore, it… accrues.

The analysts, those pale, caffeine-addicted seers, were whispering about $1.47 a share on $22.7 billion in sales. RTX delivered $1.55, adjusted for whatever accounting voodoo they’re practicing these days, on $24.2 billion. A little over, a little better. But better isn’t enough. Not in this climate. It’s like offering a band-aid to a man bleeding out on the battlefield. It feels… insufficient.

The Numbers Game

Twelve percent sales climb year over year in Q4. Sounds good on paper. Non-GAAP earnings only crawled up 1%, but GAAP earnings jumped 8%. The accounting gymnastics are enough to induce a migraine. It’s all smoke and mirrors, designed to obscure the fundamental truth: they’re selling weapons. And weapons sell. Always.

Full-year sales: $88.6 billion, a 10% increase. Q4 accelerated things, apparently. GAAP earnings for the year hit $4.96 a share – a 40% jump. Good numbers. But the real story, the one they don’t want you to focus on, is the cash flow. That’s where the true power lies.

They generated $3.2 billion in cash in Q4 – a 549% leap. Let that sink in. 549%. And $7.9 billion for the year, up 75%. This isn’t about profits, it’s about liquidity. It’s about having the resources to build more, to expand, to… dominate. The gears are turning, and they’re greased with cold, hard cash.

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The Outlook: More of the Same

CEO Chris Calio, a man who probably hasn’t seen the inside of a voting booth in decades, says they’re starting 2026 “with great momentum.” Momentum. That’s a convenient word, isn’t it? It implies unstoppable force, a relentless march forward. They’re projecting $92-93 billion in sales, about 4.4% growth. Adjusted earnings: $6.60-$6.80, roughly 6.5% growth. And free cash flow between $8.25 and $8.75 billion, or 7.6% growth. It’s all so… predictable. A meticulously crafted illusion of progress.

Modestly growing sales, amplified by improved profit margins. That’s the narrative. It’s a clean, efficient machine. But the valuation… 31 times free cash flow? That’s where it starts to feel… precarious. Like a house of cards built on a foundation of depleted uranium. The market is pricing in perfection, and perfection is a dangerous thing. Especially in this business.

Look, I’m not saying it’s a bad company. It’s a war profiteer. And war, unfortunately, is a remarkably consistent business. But at this price? It’s a SELL. A hard, cold, unequivocal SELL. Because sooner or later, the music stops. And when it does, you don’t want to be holding the bag.

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2026-01-27 18:42