RTX (NYSE: RTX) was downgraded by analysts at both Barclays Capital and RBC Capital Markets after the aerospace and defense company said Monday it would cost as much as $7 billion to repair Pratt & Whitney engines and franchise airlines for grounded aircraft.
Shares of RTX (RTX) fell 7.8% to hit a two-year low on Monday.
The company was downgraded to Equal Weight from a previous investment rating of Overweight at Barclays, lowering the price target from $100 per share to $75 per share.
“While the stock may now be considered attractive and trades at a 6.5% free cash flow yield based on Raytheon’s (RTX) revised 2025 forecast, we believe the lower end of RTX’s (RTX) recent valuation range is appropriate because we still see risk. to the company’s revised forecast,” Barclays analyst David Strauss said in a report to investors.
RTX (RTX), formerly Raytheon Technologies, was also downgraded to Sector Perform from Outperform at RBC Capital. The company lowered its price target for RTX (RTX) to $82 per share from $105 per share previously.
“We see continued risks to free cash flow prospects from both the execution of the engine repairs and the customer concessions,” Ken Herbert, an analyst at RBC Capital, said in a Sept. 11 report. “RTX (RTX) continues to trade above its historical average on a free cash flow basis, and we believe it will take a significant period of time for investors to have confidence in Pratt & Whitney’s prospects.”