RTX Corporation (RTX) Discounted Future Market Cap

RTX Corporation

RTX (NYSE)

(%)

Valuation
RTX Corporation Discounted Future Market Cap

"""
    Model: Discounted Future Market Cap

# Render model description
model.render_description(r"""
## Discounted Future Market Cap

This model estimates the intrinsic value of a common share by projecting the Future Market Capitalization using the estimated PE Ratio and then discounting it to the Present using an Annual Required Rate of Return.
""")

# Initialize assumptions
assumptions.init({
    "data": {
        "%discount_rate": None,
        "beta": data.get("profile:beta", default=1),
        "%risk_free_rate": data.get("treasury:year10"),
        "%market_premium": data.get("risk:totalEquityRiskPremium"),
        "pe_ratio": data.get("ratio:priceEarningsRatio"),
        "%revenue_growth_rate": None,
        "%net_income_margin": None,
        "historical_years": 10,
        "projection_years": 5,
    },
    "hierarchies": [{
        "parent": "%discount_rate",
        "children": ["beta", "%risk_free_rate", "%market_premium"]
    }]
})

# Calculate cost of equity
cost_of_equity = assumptions.get("%risk_free_rate") + assumptions.get("beta") * assumptions.get("%market_premium")
assumptions.set("%discount_rate", cost_of_equity)

# Compute metrics
data.compute({
    "%grossMargin": "income:grossProfit / income:revenue",
    "%operating_margin": "income:operatingIncome / income:revenue",
    "%netMargin": "income:netIncome / income:revenue",
    "%revenueGrowthRate": "function:growth:income:revenue",
    "%netIncomeGrowthRate": "function:growth:income:netIncome",
    "%totalStockholdersEquityGrowthRate": "function:growth:balance:totalStockholdersEquity",

# Calculating NOPAT (Net Operating Profit After Taxes)
    "%taxRate": "income:incomeTaxExpense / income:incomeBeforeTax",
    "incomeTax": "income:operatingIncome * %taxRate",
    "nopat": "income:operatingIncome - incomeTax",

# Calculating Invested Capital
    "investedCapital": [
        "balance:totalNonCurrentAssets", "-", "balance:cashAndCashEquivalents", "+",
        "balance:totalCurrentAssets", "-", "balance:totalCurrentLiabilities"
    ],
    "%roic": "nopat / investedCapital",
})

data.set_default_range(f"{-assumptions.get('historical_years')}->0")

assumptions.set("%net_income_margin", data.average(f"%netMargin"))
assumptions.set_bounds(
    "%net_income_margin", low=0, high="100%"
)

assumptions.set("%revenue_growth_rate", data.average(f"%revenueGrowthRate"))
assumptions.set_bounds(
    "%revenue_growth_rate", low=0, high="25%"
)

# Compute forecasted values and ratios
data.compute({
    "income:revenue": f"""
        income:revenue:-1 * 
        (1 + {assumptions.get('%revenue_growth_rate')})
    """,
    "%revenueGrowthRate": "function:growth:income:revenue",
    "income:netIncome": f"income:revenue * {assumptions.get('%net_income_margin')}",
}, forecast=assumptions.get("projection_years"))

projected_revenue = data.get("income:revenue")
projected_net_income = data.get(f"income:netIncome:{assumptions.get('projection_years')}")

shares_outstanding = data.get("income:weightedAverageShsOut")
future_market_cap = assumptions.get("pe_ratio") * projected_net_income
discounted_future_market_cap = future_market_cap / (
            (1 + assumptions.get("%discount_rate")) ** assumptions.get("projection_years"))

stock_value = discounted_future_market_cap / shares_outstanding

# Set the final value
model.set_final_value({
    "value": stock_value,
    "units": "$"
})

# Render results
model.render_results([
    [stock_value, "Present Value", "$"],
    [projected_net_income, "Estimated net income", "$"],
    [future_market_cap, "Estimated market capitalization", "$"],
    [discounted_future_market_cap, "Market capitalization discounted to present", "$"],
    [shares_outstanding, "Shares Outstanding", "#"],
    [data.get("income:eps"), "Earnings Per Share (EPS)", "$"],
    [data.get("profile:price"), "Market Price", "$"],
    [data.get("ratio:priceEarningsRatio"), "Price to Earnings (PE) Ratio", "#"]
])

# Render chart
model.render_chart({
    "data": {
        "income:revenue": "Revenue",
        "income:netIncome": "Net Income"
    },
    "start": -assumptions.get("historical_years"),
    "end": "*",
    "properties": {
        "title": "Historical and forecasted data",
        "set_editable": [
            "income:revenue",
            "income:netIncome"
        ]
    }
})

# Render table for estimated future values
model.render_table({
    "data": {
        "income:revenue": "Revenue",
        "%revenueGrowthRate": "Revenue Growth Rate",
        "income:netIncome": "Net Income",
    },
    "start": -1,
    "end": "*",
    "properties": {
        "title": "Estimated Future Values",
        "order": "ascending",
        "number_format": "M"
    }
})

# Render historical values table
model.render_table({
    "data": {
        "income:revenue": "Revenue",
        "income:costOfRevenue": "Cost of Revenue",
        "income:grossProfit": "Gross Profit",
        "%grossMargin": "Gross Margin",
        "income:operatingIncome": "Operating Income",
        "%operating_margin": "Operating Margin",
        "income:netIncome": "Net Income",
        "%netMargin": "Net Margin",
    },
    "start": -assumptions.get("historical_years"),
    "end": 0,
    "properties": {
        "title": "Historical Values",
        "display_averages": True,
        "order": "descending",
        "number_format": "M"
    },
})

# Render historical growth rates table
model.render_table({
    "data": {
        "income:revenue": "Revenue",
        "%revenueGrowthRate": "Revenue Growth Rate",
        "income:netIncome": "Net Income",
        "%netMargin": "Net Margin",
        "%netIncomeGrowthRate": "Net Income Growth Rate",
        "balance:totalStockholdersEquity": "Stockholders Equity",
        "%totalStockholdersEquityGrowthRate": "Equity Growth Rate",
        "%roic": "Return on Invested Capital (ROIC)",
        "nopat": "After-tax Operating Income",
        "%taxRate": "Income Tax Rate",
        "investedCapital": "Invested Capital",
    },
    "start": -assumptions.get("historical_years"),
    "end": 0,
    "properties": {
        "title": "Historical Growth Rates",
        "display_averages": True,
        "order": "descending",
        "number_format": "M"
    },
})

# Set description for assumptions
assumptions.set_description({
    "%discount_rate": r"""
        ## Discount Rate

`Discount Rate` = `Cost of Equity` = `Risk Free Rate` + `Beta` * `Market Premium`

The cost of equity is the theoretical rate of return that an equity investment should generate. It is calculated using the CAPM formula.

[Read More](https://www.investopedia.com/terms/c/costofequity.asp#mntl-sc-block_1-0-20)
    """,

"beta": r"""
        ## Beta

Beta is a value that measures the price fluctuations (volatility) of a stock with respect to fluctuations in the overall stock market.
    """,

"%risk_free_rate": r"""
        ## Risk-Free Rate

The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time.
        By default, it is equal to the current yield of the U.S. 10 Year Treasury Bond.
    """,

"%market_premium": r"""
        ## Market Premium

Market risk premium represents the excess returns over the risk-free rate that investors expect for taking on the incremental risks connected to the equities market.
    """,

"pe_ratio": r"""
        ## Price to Earnings (PE) Ratio

Estimated Price to Earnings (PE) Ratio at the end of the projection period.

`Future Market Cap` = `PE Ratio` * `Projected Net Income`
    """,

"%revenue_growth_rate": r"""
        ## Revenue Growth Rate

The annual revenue growth rate is applied to projected revenue starting from the second projection year onward.
    """,

"%net_income_margin": r"""
        ## Net Income Margin

Net Income expressed as a percentage of Revenue.
    """,

"historical_years": r"""
        ## Historical Years

The number of historical years used to calculate averages for historical data.
    """,

"projection_years": r"""
        ## Projection Years

The number of years for projecting the analysis into the future.
    """,
})

print("End of model.")

Estimated Value

USD

Market Price USD

* Values are not guaranteed, please do your own
research before making investment decisions.

Discounted Future Market Cap

Interactive Assumptions

Discount Rate Discount Rate `Discount Rate` = `Cost of Equity` = `Risk Free Rate` + `Beta` * `Market Premium` The cost of equity is the theoretical rate of return that an equity investment should generate. It is calculated using the CAPM formula. Read More	%
↳ Beta Beta Beta is a value that measures the price fluctuations (volatility) of a stock with respect to fluctuations in the overall stock market.	#
↳ Risk Free Rate Risk-Free Rate The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time. By default, it is equal to the current yield of the U.S. 10 Year Treasury Bond.	%
↳ Market Premium Market Premium Market risk premium represents the excess returns over the risk-free rate that investors expect for taking on the incremental risks connected to the equities market.	%
Pe Ratio Price to Earnings (PE) Ratio Estimated Price to Earnings (PE) Ratio at the end of the projection period. `Future Market Cap` = `PE Ratio` * `Projected Net Income`	#
Revenue Growth Rate Revenue Growth Rate The annual revenue growth rate is applied to projected revenue starting from the second projection year onward.	%
Net Income Margin Net Income Margin Net Income expressed as a percentage of Revenue.	%
Historical Years Historical Years The number of historical years used to calculate averages for historical data.	#
Projection Years Projection Years The number of years for projecting the analysis into the future.	#

Results
Present Value	182.8 USD
Estimated net income	8.37 Bil. USD
Estimated market capitalization	327.7 Bil. USD
Market capitalization discounted to present	245.9 Bil. USD
Shares Outstanding	1.34 Bil.
Earnings Per Share (EPS)	5.03 USD
Market Price	196 USD
Price to Earnings (PE) Ratio	39.15

Historical and forecasted data

Monetary values in USD

{"sectionId": "section-chart-1", "sectionType": "chart", "title": "Historical and forecasted data", "timeseries": "annual", "series": [{"label": "Revenue", "mappingKey": "income:revenue", "data": [{"l": "2016", "x": "2016-12-31", "y": 57244000000}, {"l": "2017", "x": "2017-12-31", "y": 59837000000}, {"l": "2018", "x": "2018-12-31", "y": 34701000000}, {"l": "2019", "x": "2019-12-31", "y": 45349000000}, {"l": "2020", "x": "2020-12-31", "y": 56587000000}, {"l": "2021", "x": "2021-12-31", "y": 64388000000}, {"l": "2022", "x": "2022-12-31", "y": 67074000000}, {"l": "2023", "x": "2023-12-31", "y": 68920000000}, {"l": "2024", "x": "2024-12-31", "y": 80738000000}, {"l": "2025", "x": "2025-12-31", "y": 88603000000}, {"l": "2026", "x": "2026-12-31", "y": 94050312440, "oy": 94050312440, "e": true, "d": 2026, "g": 6.15, "og": 6.15}, {"l": "2027", "x": "2027-12-31", "y": 99832525648, "oy": 99832525648, "e": true, "d": 2027, "g": 6.15, "og": 6.15}, {"l": "2028", "x": "2028-12-31", "y": 105970229325, "oy": 105970229325, "e": true, "d": 2028, "g": 6.15, "og": 6.15}, {"l": "2029", "x": "2029-12-31", "y": 112485279024, "oy": 112485279024, "e": true, "d": 2029, "g": 6.15, "og": 6.15}, {"l": "2030", "x": "2030-12-31", "y": 119400873979, "oy": 119400873979, "e": true, "d": 2030, "g": 6.15, "og": 6.15}], "dataType": ".", "displayAs": "line", "dataTimeseries": "annual", "hidden": false}, {"label": "Net Income", "mappingKey": "income:netIncome", "data": [{"l": "2016", "x": "2016-12-31", "y": 5055000000}, {"l": "2017", "x": "2017-12-31", "y": 4552000000}, {"l": "2018", "x": "2018-12-31", "y": 5269000000}, {"l": "2019", "x": "2019-12-31", "y": 5537000000}, {"l": "2020", "x": "2020-12-31", "y": -3519000000}, {"l": "2021", "x": "2021-12-31", "y": 3864000000}, {"l": "2022", "x": "2022-12-31", "y": 5197000000}, {"l": "2023", "x": "2023-12-31", "y": 3195000000}, {"l": "2024", "x": "2024-12-31", "y": 4774000000}, {"l": "2025", "x": "2025-12-31", "y": 6732000000}, {"l": "2026", "x": "2026-12-31", "y": 6592926902, "oy": 6592926902, "e": true, "d": 2026, "g": -2.07, "og": -2.07}, {"l": "2027", "x": "2027-12-31", "y": 6998260047, "oy": 6998260047, "e": true, "d": 2027, "g": 6.15, "og": 6.15}, {"l": "2028", "x": "2028-12-31", "y": 7428513075, "oy": 7428513075, "e": true, "d": 2028, "g": 6.15, "og": 6.15}, {"l": "2029", "x": "2029-12-31", "y": 7885218059, "oy": 7885218059, "e": true, "d": 2029, "g": 6.15, "og": 6.15}, {"l": "2030", "x": "2030-12-31", "y": 8370001265, "oy": 8370001265, "e": true, "d": 2030, "g": 6.15, "og": 6.15}], "dataType": ".", "displayAs": "line", "dataTimeseries": "annual", "hidden": false}], "editableDates": {"2026-12-31": 42, "2027-12-31": 43, "2028-12-31": 44, "2029-12-31": 45, "2030-12-31": 46}, "properties": {"display_table": true}, "width": "full"}

Edit Chart Values	2026-12-31	2027-12-31	2028-12-31	2029-12-31	2030-12-31

↳ Growth Rate

Estimated Future Values

Monetary values in USD amounts except #	2025 Dec 31	LTM Feb 26	2026 Dec 31	2027 Dec 31	2028 Dec 31	2029 Dec 31	2030 Dec 31
Revenue	88,603	88,603	94,050	99,833	105,970	112,485	119,401
Revenue Growth Rate	9.74%	0%	6.15%	6.15%	6.15%	6.15%	6.15%
Net Income	6,732	6,732	6,593	6,998	7,429	7,885	8,370

Monetary values in USD

amounts except #

2025
Dec 31

LTM
Feb 26

2026
Dec 31

2027
Dec 31

2028
Dec 31

2029
Dec 31

2030
Dec 31

Revenue

88,603

94,050

99,833

105,970

112,485

119,401

Revenue Growth Rate

9.74%

6.15%

Net Income

6,732

6,593

6,998

7,429

7,885

8,370

Historical Values

Monetary values in USD amounts except #	Average	LTM Feb 26	2025 Dec 31	2024 Dec 31	2023 Dec 31	2022 Dec 31	2021 Dec 31	2020 Dec 31	2019 Dec 31	2018 Dec 31	2017 Dec 31	2016 Dec 31
Revenue	64,731	88,603	88,603	80,738	68,920	67,074	64,388	56,587	45,349	34,701	59,837	57,244
Cost of Revenue	51,353	70,814	70,814	65,328	56,831	53,406	51,897	48,056	34,598	27,465	44,201	41,471
Gross Profit	13,378	17,789	17,789	15,410	12,089	13,668	12,491	8,531	10,751	7,236	15,636	15,773
Gross Margin	20.9%	20.08%	20.08%	19.09%	17.54%	20.38%	19.4%	15.08%	23.71%	20.85%	26.13%	27.55%
Operating Income	5,600	9,300	9,300	6,538	3,561	5,504	5,136	-1,889	4,914	2,877	8,138	8,221
Operating Margin	8.56%	10.5%	10.5%	8.1%	5.17%	8.21%	7.98%	-3.34%	10.84%	8.29%	13.6%	14.36%
Net Income	4,308	6,732	6,732	4,774	3,195	5,197	3,864	-3,519	5,537	5,269	4,552	5,055
Net Margin	7.01%	7.6%	7.6%	5.91%	4.64%	7.75%	6%	-6.22%	12.21%	15.18%	7.61%	8.83%

Historical Growth Rates

Monetary values in USD amounts except #	Average	LTM Feb 26	2025 Dec 31	2024 Dec 31	2023 Dec 31	2022 Dec 31	2021 Dec 31	2020 Dec 31	2019 Dec 31	2018 Dec 31	2017 Dec 31	2016 Dec 31
Revenue	64,731	88,603	88,603	80,738	68,920	67,074	64,388	56,587	45,349	34,701	59,837	57,244
Revenue Growth Rate	6.15%	0%	9.74%	17.15%	2.75%	4.17%	13.79%	24.78%	30.68%	-42.01%	4.53%	2.04%
Net Income	4,308	6,732	6,732	4,774	3,195	5,197	3,864	-3,519	5,537	5,269	4,552	5,055
Net Margin	7.01%	7.6%	7.6%	5.91%	4.64%	7.75%	6%	-6.22%	12.21%	15.18%	7.61%	8.83%
Net Income Growth Rate	-28.15%	0%	41.01%	49.42%	-38.52%	34.5%	-209.8%	-163.6%	5.09%	15.75%	-9.95%	-33.56%
Stockholders Equity	55,065	65,245	65,245	60,156	59,798	72,632	73,068	72,163	41,774	38,446	29,610	27,579
Equity Growth Rate	10.13%	0%	8.46%	0.599%	-17.67%	-0.597%	1.25%	72.75%	8.66%	29.84%	7.36%	0.808%
Return on Invested Capital (ROIC)	4.83%	7.18%	7.18%	5%	2.89%	4.22%	3.53%	-2%	5.01%	1.67%	8.12%	10.33%
After-tax Operating Income	4,323	7,528	7,528	5,291	3,138	4,793	4,167	-2,351	4,416	1,615	5,158	6,265
Income Tax Rate	17.35%	19.05%	19.05%	19.07%	11.89%	12.91%	18.87%	-24.44%	10.14%	43.85%	36.62%	23.79%
Invested Capital	98,377	104,860	104,860	105,784	108,521	113,530	118,123	117,503	88,084	96,691	63,544	60,643