A major force in a developing market is RTX Corporation

Investors can anticipate years of increasing profits thanks to RTX Corporation's order backlog

Although Donald Trump's plan to buy Greenland for the US may be nearing a resolution, there are still many other global uncertainties that could impact equity investors, such as the US imposing additional tariffs, a Chinese invasion of Taiwan (which is more likely now that President Xi Jinping has solidified his position), a war in Iran, and additional Russian attacks in Europe now that the US is placing less importance on Europe and NATO.

Investors must consider how these factors affect markets and determine whether AI is a bubble or a continuing growth story. As a result, investors seek out robust businesses with a sizable market share in growth markets that are steady and lucrative. The American company RTX Corporation (NYSE: RTX) is a prime illustration.

With a £268 billion market valuation, RTX is a company that manufactures fighter and bomber engines, missile systems, munitions, and aircraft parts for both the defense and civilian aerospace industries. These markets are expanding. Over the next five years, civilian aerospace is expected to grow at a compound annual growth rate of at least 5% to 8%. As European nations increase their defense budgets, defense is also anticipated to grow significantly. Additionally, Trump wants to increase the US defense budget from £900 billion in 2026 to £1.05 trillion in 2027.

The F-35 is powered by RTX.

Collins Aerospace, Pratt and Whitney, and Raytheon (missiles and munitions) are the three similar-sized divisions of RTX. Helicopters, space systems, airport and air traffic management systems, and commercial and military aerospace (cockpit and cabin interiors) are among the products and services Collins offers.

With a majority share of regional jet engines, Pratt & Whitney is the second-largest of the three international suppliers of aero-engines, offering engines for all commercial aircraft types. Radars, sensors, "iron dome" defense systems, missiles, Patriot anti-missile systems, and powerful laser systems are all produced by Raytheon. All three RTX divisions developed systems and components for the F-35 fifth-generation stealth fighter. Raytheon supplies medium- and short-range missiles, smart bombs, and laser-guided precision bombs; Pratt & Whitney supplies the engine; Collins supplies the integrated power and thermal management system as well as the helmet-mounted display.

With an order backlog of £218 billion, RTX's 2024 turnover was £80 billion, representing an 11% increase in organic sales over 2023. The company claims that this is an example of "unprecedented demand". As of January 2025, adjusted sales were expected to reach £83 billion to £84 billion for the entire year, while adjusted earnings per share (EPS) were expected to range from £6 to £6.15. The shares increased by almost 4 percent after the 2025 results, which were revealed on January 27, showed a turnover of £88.6 billion and an adjusted EPS of £6.29. The modifications permit Collins to sell off a non-core business. The backlog of orders for January 2026 had grown to £268 billion.

RTX's four growth drivers.

Serving both commercial and military clients across three sizable segments, RTX's product line helps to predict its growth. It has four primary drivers of growth. The first is its sizable and growing backlog, which provides a clear picture of upcoming earnings. Additionally, RTX takes advantage of scaling up as production increases to clear the backlog, which lowers expenses and, in conjunction with internal efficiency drives, increases margins so that profits exceed sales.

Second, following COVID, the commercial aerospace aftermarket is rebounding. For Collins and Pratt & Whitney, this increases demand for maintenance, spare parts, and retrofit work. This aftermarket has been expanding at double-digit rates lately and has larger margins. Thirdly, demand for missile systems, radar, and electronic warfare technology is being driven by growing global defense budgets. Fourthly, by making significant investments in R&D, RTX is advancing advanced materials, AI data analytics, and next-generation aircraft propulsion systems to increase efficiency.

A peek inside the engine.

Given its sizable order backlog and four growth drivers, RTX should expect to see years of profits that outpace sales.

As of the end of December 2025, the company's sales were £88 billion, its operating profit was £10 billion, its adjusted earnings per share (EPS) was £629, its free cash flow was £7.9 billion, and it had a £268 billion order backlog.

In 2025, new orders totaling £138 billion were added. According to these figures, sales and EPS both experienced organic growth of 11% and 10%, respectively. The company projects £92 billion to £93 billion in sales, £660 to £680 in EPS, and £825 billion to £875 billion in free cash flow in 2026.

With sales of £24.2 billion, up 14% organically, the fourth quarter of the 2025 fiscal year was remarkable. With a 25 percent increase in sales, Pratt & Whitney was the front-runner. This increase was fueled by a 21 percent increase in commercial aftermarket sales, a 28 percent increase in commercial original equipment sales, and a 30 percent increase in military sales as a result of increased F-35production.

The 2025 results' growth indicators include a 20 percent increase in munitions sales, £2.63 billion in capital expenditures, £7.4 billion for research and development, and investment in future innovative growth. Among the weapons are the Coyote small anti-drone missile, the AMRAAM medium-range air-to-air missile, and the GEM-T guided tactical missile.

All three of RTX's divisions are operating profitably, and the company has a three-year order backlog of sales, which puts it in an enviable position. The 2026 p/e is 29.3, dropping to 24.2 for 2028 at the current share price of £199.3. The dividend has been increasing since 2021, and the forward dividend yield is 1 percent. The shares should continue to rise after rising 59.7% in the last year.

RTX Corporation.