Street View: RTX's warning of potential $850 million tariff hit likely a worst-case scenario

RTX RTX.N on Tuesday cautioned that U.S. President Donald Trump's tariffs could chip away $850 million from its 2025 profits, even as the aerospace and defense company beat expectations for quarterly results and reaffirmed its full-year forecasts.

TARIFF IMPACT COULD BE LESS SEVERE

Citigroup ("buy," PT: $148) views the $850 million tariff headwind as likely a worst-case scenario as "the tariff regime could improve over time and management has several mitigating levers to pull, including continuing price increases, better supply chain management, and productivity"

Brokerage says, "away from tariffs, the rest of the story seemed intact in 1Q – demand across both commercial aero and defense remains robust"

RBC Capital Markets ("outperform," lowers PT to $140 from $150) confident that RTX can "outperform its potential ~$850M EBIT headwind" and views RTX's tariff analysis as representing more of the worst-case scenario

RBC currently models a ~10% (~$0.05 in EPS) hit of the $850M warning to segment operating income in 2Q25 given the exposure already seen

Morningstar (fair value: $134) sees the potential tariff impact as muted, and unlikely to materialize or remain in effect for long.