RTX is no longer a recovery story about grounded geared-turbofan fleets. The June quarter is a conversion print: a record order book, international air-defense awards at Raytheon, and Pratt aftermarket volume that is finally throwing off cash rather than absorbing powder-metal compensation. The market has already moved the multiple from a distressed-engine discount toward a clean aerospace-and-defense compounder. The open question is whether that re-rating still has room once the second-half comparison stack normalizes.
The strategic tension sits underneath an otherwise clean headline. Raytheon booked $19.9 billion of awards in the quarter, with Patriot GEM-T and classified work pushing book-to-bill above two. Pratt commercial aftermarket rose on Geared Turbofan shop visits even as commercial original-equipment sales declined on large-engine mix. Collins grew organically after stripping last year's divestitures. Free cash flow reached $2.9 billion, helped by engine deliveries and international advances at Raytheon. That is a high-quality quarter. It is also a quarter that still carries powder-metal customer compensation and a remaining accrual that is not yet zero.
Management raised the full-year outlook for adjusted sales, adjusted earnings, and free cash flow on first-half run-rate and the backlog. The same call flagged a second-half organic growth step-down toward the mid-single digits on tough comparisons, including last year's Pratt work stoppage. The raised adjusted earnings outlook now sits in the low-seven-dollar area. Does the share price near $194 already capitalize a multi-year Patriot and Geared Turbofan aftermarket annuity that still needs to clear remaining fleet-management work and an independent compliance monitor?