What Happened?
Shares of aerospace and defense company Raytheon (NYSE:RTX) fell 3.2% in the morning session after the company reported its second-quarter financial results, which included a lower full-year earnings forecast due to the expected impact of tariffs and tax law changes.
Although RTX beat Wall Street's expectations for both revenue and adjusted earnings per share in the quarter, the downward revision to its full-year profit outlook weighed on investor sentiment. The company increased its sales forecast for the year, citing strong operational performance and a growing backlog that reached $236 billion. However, it cut its adjusted earnings per share (EPS) guidance from a range of $6.00-$6.15 to $5.80-$5.95. The adjustment reflected the anticipated effects of new tariffs and changes in U.S. tax legislation. The market's reaction suggested that concerns over future profitability, driven by these external economic factors, overshadowed the strong quarterly sales growth.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy RTX? Access our full analysis report here, it’s free.
What Is The Market Telling Us
RTX’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was about 1 month ago when the stock gained 10.5% on the news that Israel carried out significant strikes on Iranian nuclear and military sites, dramatically escalating fears of a broader conflict in the Middle East. Companies like Lockheed Martin, RTX, and Northrop Grumman saw gains as the market anticipated higher defense spending and new orders.
RTX is up 27.9% since the beginning of the year, and at $148.42 per share, it is trading close to its 52-week high of $151.56 from July 2025. Investors who bought $1,000 worth of RTX’s shares 5 years ago would now be looking at an investment worth $2,333.
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