RTX downgraded to Hold at Argus on lack of earnings visibility

Argus analyst John Eade downgraded RTX to Hold from Buy. The company’s business mix appears favorable compared to that of most defense industry peers given its exposure to the rebounding commercial aerospace segment, but a quality-control problem that emerged will have a substantial impact on free cash flow in 2023, the analyst tells investors in a research note. While the stock is trading in line with or below peer averages on metrics such as P/E and price/sales, given the murky earnings outlook, RTX shares look “fairly valued”, Argus adds.