Shares of RTX Corporation (RTX) are up in premarket trading Wednesday. The reason? A fresh, significant defense contract with Germany.

It’s a straightforward piece of business news: a defense contractor gets a contract. But the details tell a more interesting story about European military spending, how RTX is positioning itself, and what investors are watching beyond the headline.

The German Deal and the European Trend

RTX announced that its Raytheon ELCAN division will supply the German Armed Forces with customized Specter® DR sights. These aren't off-the-shelf items; they're being tailored to meet specific German operational requirements. The configuration is also a bit innovative, including an Aimpoint® reflex sight for what the company describes as "enhanced versatility in combat scenarios."

This isn't a one-off. The company says this German order is part of a surge in European demand. Since August of last year, total orders for these sights across Europe have surpassed €193 million. Looking back a bit further, Germany has joined a club that includes Denmark, Lithuania, Spain, Italy, and Finland in ordering over 100,000 Specter DR sights since last year.

It's a tangible example of the increased defense spending happening across Europe, and RTX appears to be a direct beneficiary. The contract underscores the company's argument that it can meet diverse international military needs with advanced, customized solutions.

A $200 Million Bet on Making More Engine Parts

In a separate but related development, RTX's Pratt & Whitney subsidiary announced a $200 million expansion at its facility in Columbus, Georgia. The investment will add a seventh isothermal forging press. The payoff, expected when it comes online in 2028, is a 30% boost in output for key engine components.

This expansion supports two major programs: the commercial GTF engine and the military F135 engine program. It follows a recent $70 million upgrade that increased maintenance, repair, and overhaul (MRO) capacity for the GTF engine by 25%. All told, Pratt & Whitney has invested over $1 billion in the Columbus site since 2008. The facility currently employs more than 2,600 people.

Think of it as RTX putting more money behind its own growth, betting that demand for both commercial and military engines will remain strong for years to come.

How's the Stock Doing?

Quite well, over the long haul. Over the past 12 months, RTX shares have appreciated by 55.85%. The stock is currently trading just below its 20-day simple moving average (SMA) of $200.28 but remains comfortably above its 100-day and 200-day SMAs, which suggests the longer-term upward trend is intact. It's also trading near its 52-week high of $206.73.

The shorter-term technical picture, however, is a bit mixed. The Relative Strength Index (RSI) sits at 50.94, which is basically neutral—neither overbought nor oversold. Meanwhile, the MACD indicator is currently below its signal line, which some traders read as a sign of near-term bearish pressure. The takeaway? The long-term trend looks positive, but there might be some bumps or consolidation in the immediate future.

What Are Analysts Saying?

The consensus rating on RTX remains a Buy, with an average price target of $186.43. It's worth noting that several major firms have recently raised their targets:

• Citigroup: Reiterated Buy and raised its price target to $238.00 (Feb. 5).
• JP Morgan: Reiterated Overweight and raised its price target to $215.00 (Jan. 28).
• RBC Capital: Reiterated Outperform and raised its price target to $230.00 (Jan. 28).

Looking further ahead, the next major earnings report is scheduled for April 21, 2026. Current estimates forecast earnings per share (EPS) of $1.51 (up from $1.47 year-over-year) and revenue of $21.39 billion (up from $20.31 billion). Based on these estimates, the stock trades at a forward P/E ratio of about 40.0x, which indicates a premium valuation compared to many peers.

A market data assessment of the stock highlights this dynamic. It gives RTX a very strong score for Quality (93.45) and Momentum (85.56), reflecting robust corporate performance and market interest. However, it scores weakly on Value (21.99), which directly points to that premium price tag. The verdict from this analysis is that RTX presents a solid investment profile, but the high valuation is something investors need to factor into their decisions.

ETF Exposure: Why Fund Flows Matter

RTX isn't just held by individual investors; it's a major holding in several exchange-traded funds (ETFs). This creates a mechanical link between flows into these funds and trading in RTX stock.

• Capital Group Dividend Value ETF (CGDV): 4.94% weight in RTX.
• Invesco Aerospace & Defense ETF (PPA): 8.88% weight in RTX.
• Global X Defense Tech ETF (SHLD): 7.86% weight in RTX.

The significance here is practical: if investors pour money into these ETFs, the fund managers are obligated to buy more RTX shares to maintain those weightings. Conversely, large outflows would force selling. It's an extra layer of supply and demand on top of the company's fundamental news.

In early trading Wednesday, RTX shares were up 0.17% at $198.80.