03:07 PM EST, 12/19/2024 (MT Newswires) -- RTX's (RTX) defense portfolio should be "well positioned" during Trump's second presidency, RBC Capital Markets said in a note emailed Thursday.

Noting that while the company did face risk with the F-35, RBC said RTX was "best positioned" when compared to its peers from the re-stocking of missiles and missile defense growth which represent about 30% of its defense sales.

The firm added that it expects the company's defense backlog to be "mostly resilient" to potential cost-cutting measures from the proposed Department of Government Efficiency, or DOGE.

RBC said it views RTX's diversification between defense/commercial and original equipment/aftermarket as a positive heading into 2025. Growth in the aftermarket segment in particular should support confidence in the company's planned free cash flow of around $7 billion in 2025, it added.

"Looking at our sum-of-the-part analysis, we believe that the valuation for RTX remains attractive," RBC wrote.

RBC upgraded the stock to outperform from sector perform and increased its price target by $10 to $140.

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