Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
RTX Corp., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The financial data reveals several important trends in profitability and earnings performance over the five-year period.
- Net Income (Loss) Attributable to Common Shareowners
- There is a marked recovery and growth from a substantial loss of 3,519 million USD in 2020 to a positive net income of 3,864 million USD in 2021. This positive trajectory continues with increases to 5,197 million USD in 2022, a slight decline to 3,195 million USD in 2023, and a subsequent rise again to 4,774 million USD in 2024. The fluctuations indicate some variability in profitability but an overall strong turnaround and growth pattern from the initial loss.
- Earnings Before Tax (EBT)
- The EBT follows a similar recovery profile starting from a negative 2,353 million USD in 2020 to a positive 4,931 million USD in 2021. Thereafter, the upward trend continues reaching 6,027 million USD in 2022, decreasing to 3,836 million USD in 2023 before rising back to 6,194 million USD in 2024. This volatility in 2023 is consistent with the movements in net income, indicating possible operational or economic factors temporarily affecting profitability before recovery.
- Earnings Before Interest and Tax (EBIT)
- The EBIT metric shows an initial negative value of 923 million USD in 2020, turning positive at 6,261 million USD in 2021. This is followed by a peak of 7,327 million USD in 2022, a dip to 5,489 million USD in 2023, and then a rebound to 8,164 million USD in 2024. The pattern is again consistent with the other earnings measures, demonstrating improving operational profitability albeit with a transient softening in 2023.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA starts at 3,233 million USD in 2020, significantly increasing to 10,818 million USD in 2021. This rise continues to 11,435 million USD in 2022, followed by a reduction to 9,700 million USD in 2023, and then an increase to 12,528 million USD in 2024. This trajectory reinforces the overall improvement in cash earnings, despite the intermediate decrease in 2023.
Overall, the data indicates a strong recovery from the losses experienced in 2020, with consistent improvements in profitability and earnings across all major financial metrics through 2021 and 2022. The year 2023 shows a recurring pattern of decline across metrics, suggesting temporary factors impacting results during that period. The subsequent rebound in 2024 signifies renewed strength and growth momentum. This analysis suggests the company has successfully navigated a difficult period and returned to a robust financial position with solid earnings growth potential.
Enterprise Value to EBITDA Ratio, Current
RTX Corp., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 232,392) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 12,528) |
| Valuation Ratio | |
| EV/EBITDA | 18.55 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Boeing Co. | — |
| Caterpillar Inc. | 13.43 |
| Eaton Corp. plc | 26.24 |
| GE Aerospace | 27.58 |
| Honeywell International Inc. | 18.17 |
| Lockheed Martin Corp. | 14.49 |
| EV/EBITDA, Sector | |
| Capital Goods | 24.83 |
| EV/EBITDA, Industry | |
| Industrials | 18.75 |
Based on: 10-K (reporting date: 2024-12-31).
1 Click competitor name to see calculations.
If the company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if the company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.
Enterprise Value to EBITDA Ratio, Historical
RTX Corp., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 210,519) | 161,239) | 170,615) | 167,423) | 134,857) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 12,528) | 9,700) | 11,435) | 10,818) | 3,233) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 16.80 | 16.62 | 14.92 | 15.48 | 41.71 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Boeing Co. | — | 71.32 | — | — | — | |
| Caterpillar Inc. | 12.46 | 12.16 | 13.86 | 12.43 | 19.87 | |
| Eaton Corp. plc | 21.53 | 24.91 | 19.18 | 17.06 | 22.11 | |
| GE Aerospace | 22.88 | 11.06 | 14.82 | 95.57 | 9.35 | |
| Honeywell International Inc. | 15.87 | 15.55 | 18.01 | 15.57 | 20.21 | |
| Lockheed Martin Corp. | 14.23 | 11.71 | 14.98 | 11.97 | 9.97 | |
| EV/EBITDA, Sector | ||||||
| Capital Goods | 21.78 | 16.03 | 19.01 | 19.87 | 25.02 | |
| EV/EBITDA, Industry | ||||||
| Industrials | 17.18 | 14.82 | 16.44 | 16.30 | 30.80 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
3 2024 Calculation
EV/EBITDA = EV ÷ EBITDA
= 210,519 ÷ 12,528 = 16.80
4 Click competitor name to see calculations.
- Enterprise Value (EV) Trend
- The enterprise value increased significantly from US$134,857 million in 2020 to US$167,423 million in 2021, marking a substantial growth. The value continued to rise slightly in 2022 to US$170,615 million but experienced a decline in 2023 to US$161,239 million. In 2024, there was a strong rebound, with the enterprise value reaching its highest point at US$210,519 million, suggesting renewed market confidence or asset revaluation.
- EBITDA Performance
- Earnings before interest, tax, depreciation, and amortization demonstrated a remarkable increase from US$3,233 million in 2020 to US$10,818 million in 2021. The upward trend persisted in 2022 with EBITDA rising to US$11,435 million. However, 2023 saw a decline in EBITDA to US$9,700 million, indicating potential operational challenges or increased costs during that year. The EBITDA improved again in 2024, reaching US$12,528 million, surpassing prior levels and highlighting enhanced profitability or operational efficiency.
- EV/EBITDA Ratio Analysis
- The EV/EBITDA multiple experienced a sharp decrease from 41.71 in 2020 to 15.48 in 2021, which may reflect a substantial increase in EBITDA relative to enterprise value, potentially indicating improved valuation attractiveness or underlying earnings strength. This ratio remained relatively stable in 2022 at 14.92, suggesting consistent valuation metrics during that period. It increased slightly to 16.62 in 2023, consistent with the EBITDA decline and lower enterprise value. The ratio remained steady at 16.8 in 2024 despite the increase in EV and EBITDA, indicating valuation levels stabilizing around this multiple.
- Summary of Key Insights
- The financial data reveals a period of strong growth in both enterprise value and EBITDA from 2020 through 2022, followed by a temporary dip in operating earnings and valuation multiples in 2023. The recovery in 2024, with the highest EV and EBITDA recorded, suggests a positive turnaround in financial performance. The EV/EBITDA ratio's movement indicates that the market valuation relative to operating earnings improved substantially after 2020 and has since stabilized at a lower multiple than the initial 2020 level, reflecting potentially improved earnings quality or market perception.