As of June 7, 2025, Raytheon Technologies Corp has a Discounted Cash Flow (DCF) derived fair value of $201.00 per share. With the current market price at $139.10, this represents a potential upside of 44.5%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $139.91 |
| DCF Fair Value (10-year) | $201.00 |
| Potential Upside (5-year) | 0.6% |
| Potential Upside (10-year) | 44.5% |
| Discount Rate (WACC) | 6.8% - 8.7% |
Revenue is projected to grow from $80738 million in 12-2024 to $165482 million by 12-2034, representing a compound annual growth rate of approximately 7.4%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 80738 | 17% |
| 12-2025 | 84924 | 5% |
| 12-2026 | 96224 | 13% |
| 12-2027 | 106580 | 11% |
| 12-2028 | 115725 | 9% |
| 12-2029 | 123787 | 7% |
| 12-2030 | 131116 | 6% |
| 12-2031 | 142950 | 9% |
| 12-2032 | 150097 | 5% |
| 12-2033 | 157602 | 5% |
| 12-2034 | 165482 | 5% |
Net profit margin is expected to improve from 6% in 12-2024 to 13% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 5013 | 6% |
| 12-2025 | 6401 | 8% |
| 12-2026 | 8491 | 9% |
| 12-2027 | 10748 | 10% |
| 12-2028 | 13101 | 11% |
| 12-2029 | 15512 | 13% |
| 12-2030 | 16431 | 13% |
| 12-2031 | 17914 | 13% |
| 12-2032 | 18809 | 13% |
| 12-2033 | 19750 | 13% |
| 12-2034 | 20737 | 13% |
with a 5-year average of $2693 million. Projected CapEx is expected to maintain at approximately 4% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 2973 |
| 12-2026 | 3272 |
| 12-2027 | 3562 |
| 12-2028 | 3846 |
| 12-2029 | 4180 |
| 12-2030 | 4546 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 117 |
| Days Inventory | 73 |
| Days Payables | 69 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 9621 | 1116 | 2525 | 1781 | 4199 |
| 2026 | 15963 | 1975 | 3815 | 3966 | 6208 |
| 2027 | 19276 | 2500 | 4225 | 2765 | 9786 |
| 2028 | 22671 | 3047 | 4588 | 3295 | 11742 |
| 2029 | 26164 | 3608 | 4907 | 2621 | 15029 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 139.91 | 0.6% |
| 10-Year DCF (Growth) | 201.00 | 44.5% |
| 5-Year DCF (EBITDA) | 158.80 | 14.2% |
| 10-Year DCF (EBITDA) | 202.46 | 45.6% |
Is Raytheon Technologies Corp (RTX) a buy or a sell? Raytheon Technologies Corp is definitely a buy. Based on our DCF analysis, Raytheon Technologies Corp (RTX) appears to be significantly undervalued with upside potential of 44.5%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $139.10.