Great News for RTX Investors (Hint: It Relates to Its Record $289 Billion Backlog)

Great News for RTX Investors (Hint: It Relates to Its Record $289 Billion Backlog)

Lee Samaha, The Motley Fool

Tue, September 22, 2026 at 6:50 PM GMT+3 3 min read

RTX (NYSE: RTX) CEO Chris Calio's presentation at the Morgan Stanley 14th Annual Laguna Conference last week highlighted the importance of its remaining performance obligations (RPO), or backlog, of $289 billion, as well as the potential for future growth. It's clear that RTX isn't resting on the laurels of its existing RPO, and there's a good chance it could rise in line with the Wall Street consensus (according to Visible Alpha) to $460.5 billion by the end of 2028.

What Chris Calio said

Calio said two things at the conference of particular note regarding the backlog. The first was the description of strength in orders (which add to RPO) across its three end markets: commercial aerospace original equipment (OE), commercial aerospace, and defense. He discussed ongoing strength in aftermarket orders. On the OE side, Calio noted that Boeing and Airbus have a "15,000 aircraft backlog" to execute on, and that demand exists for new, more fuel-efficient aircraft. Finally, on defense, he said demand was "more and faster. Integrated air and missile defense, not only here in the U.S. but internationally, is top of mind for every country around the world."

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Second, he also noted the $289 billion RPO at the end of the second quarter doesn't include the recently awarded $22.9 billion seven-year Tomahawk cruise missile order, or the five framework agreements it made with the Department of Defense in February (missiles and interceptors, including Tomahawks), of which Calio said, "you're going to see the volumes rise anywhere from 2 to 4x."

RTX's backlog is more attractive than you might think

The current RPO is split between $170 billion in commercial aerospace and $119 billion in defense, with a long duration, ensuring a long-term revenue stream. Only 25% of its RPO is set to be recognized in the next 12 months. Per Calio, "Approximately 45% of our RPO relates to long-term commercial aerospace maintenance contracts at Pratt & Whitney, which are generally expected to be realized over a span of up to 20 years."

Aircraft engine makers, such as the commercial aerospace-focused Pratt & Whitney, tend to have long streams of recurring aftermarket revenue, as engines can be used for over 40 years.

In addition, the framework agreements Calio discussed include relatively mature, combat-proven technologies. Although they do contain advanced technologies and execution risk in the supply chain and production, they are significantly lower risk than the kind of fixed-price development programs that have troubled Boeing and Lockheed Martin in recent years -- which is one reason why RTX is better positioned than Lockheed within the defense sector.

RTX's growth prospects

The combination of a long-duration commercial aerospace backlog and a rapidly growing defense backlog (which doesn't yet reflect the full potential of the five framework agreements) promises further RPO growth, making RTX an excellent way to play the resurgent commercial aerospace and defense end markets.

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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Boeing, Lockheed Martin, and RTX. The Motley Fool has a disclosure policy.

Great News for RTX Investors (Hint: It Relates to Its Record $289 Billion Backlog) was originally published by The Motley Fool