Raytheon Technologies (NYSE:RTX) is considering selling its actuation unit, according to Bloomberg. The report highlighted that the actuation unit, which is part of Raytheon’s Collins Aerospace Systems business, could garner interest from private equity firms and fetch $1B for RTX.
According to the report, the aerospace and defense company has appointed advisors to explore strategic options for the actuation unit, which primarily manufactures flight controls.
RTX is benefitting from its business’s prominence in the defense sector. Russia’s invasion of Ukraine has driven demand for its advanced air defense systems. Meanwhile, given the ongoing threat, the global defense budget has increased, providing RTX with a solid runway for growth.
Thanks to the higher demand, Raytheon is getting more orders for its products from domestic and international markets. Further, this has driven its backlogs higher, which is positive. Meanwhile, on the commercial side, the recovery in air traffic and aftermarket sales bode well for revenue growth.
Is RTX a Good Stock to Buy?
The strength in its defense business, increasing backlogs, and high aftermarket sales on the commercial side provide a solid base for growth. Meanwhile, the company said it would continue to aggressively repurchase shares and increase the dividend each year. This will enhance the overall returns for its shareholders.
On TipRanks, RTX stock has a Moderate Buy consensus rating based on nine Buys and four Holds. Moreover, analysts’ average price target of $105.50 implies 4.58% upside potential.
While analysts are bullish, hedge funds sold 1.7M RTX stock in the last quarter. Nevertheless, it has an Outperform Smart Score of eight.
