Here's How RTX Shocked the Market Today (Hint: It's Tariff Related)
Comments about tariff impacts helped send the stock of aerospace and defense company RTX (NYSE: RTX) down today. It was down 10.5% at 1:30 p.m. ET as broader markets rallied.
RTX's first-quarter earnings and guidance
There was nothing wrong with RTX's first-quarter earnings report released today, and the full-year sales and earnings guidance remained the same, with management continuing to expect organic sales growth of 4%-6%, adjusted EPS of $6.00-$6.15, and free cash flow (FCF) of $7 billion to $7.5 billion.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
However, the market was shocked by management's estimates for the potential impact of tariff actions. For context, RTX's adjusted operating profit was about $10.2 billion in 2024.
|
Tariff |
Negative Impact on Operating Profit |
|---|---|
|
Canada and Mexico tariffs |
~$250 million |
|
China/Tariffs from China |
~$250 million |
|
Global reciprocal |
~$300 million |
|
Steel and aluminum |
~$50 million |
|
Total |
~$850 million |
Data source: RTX presentations.
It gets worse. These estimates include mitigating actions management can take to alleviate the impact. Also, CFO Neil Mitchill told investors on the earnings call that "the cash flow impact would be a bit larger" due to delays in getting refunds on duties.
Where next for RTX
The news is obviously disappointing, but it's in the stock's price now and that $850 million arguably represents upside potential if there's a resolution to the trade conflict -- something all parties say they want -- an interesting situation that investors will need to continue to watch.
Should you invest $1,000 in RTX right now?
Before you buy stock in RTX, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and RTX wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $532,771!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $593,970!*
Now, it’s worth noting Stock Advisor’s total average return is 781% — a market-crushing outperformance compared to 149% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of April 21, 2025
Lee Samaha has no position in any of the stocks mentioned. The Motley Fool recommends RTX. The Motley Fool has a disclosure policy.
Recommended Articles
