By Colin Kellaher
Aerospace and defense company RTX is set to buy back $10 billion worth of stock as part of an accelerated repurchase program. This move comes shortly after the company experienced a drop in shares to a 52-week low. RTX's post-merger shareowner capital return commitment will now range between $36 billion and $37 billion through 2025, up from the previous target of $33 billion to $35 billion.
RTX faced challenges earlier this year when it discovered suspected contaminated metal in certain Pratt & Whitney engine parts. The situation resulted in the need for expedited inspections and the grounding of planes, which led to substantial costs estimated to be up to $7 billion for engine repairs and airline compensation.
After hitting a low of $68.56 on October 6, RTX's stock closed on Monday at $73.13, bringing its market capitalization to over $105 billion. Despite recent setbacks, RTX believes that its shares present an attractive investment opportunity. The repurchase program will be funded through a combination of short- and long-term debt.
Looking ahead, RTX plans to begin deleveraging in the coming year with the help of proceeds from planned divestitures.
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