New York, Jan 11, 2026, 14:32 EST — The market has closed.
- RTX ended Friday 0.7% higher, closing at $188.50.
- Contractors are grappling with a new White House directive that links dividends, buybacks, and executive compensation to meeting delivery deadlines.
- Attention now turns to enforcement specifics and RTX’s results on Jan. 27 for clues about cash returns.
RTX shares closed Friday up 0.7% at $188.50. Over the weekend, attention shifted to a White House effort aimed at limiting defense contractor profits. When U.S. markets open Monday, traders will be weighing the potential impact of these moves. (Businessinsider)
Defense contractors like RTX have been reaching out to lawyers after President Donald Trump signed an executive order tying share buybacks, dividends, and executive pay to weapons delivery timelines, three sources told Reuters. White House spokeswoman Anna Kelly declared, “the days of defense contractors prioritizing investor returns over military readiness are over.” Contracting attorney Franklin Turner of McCarter & English warned some companies might face “a nasty letter” followed by withheld pay or contract terminations. Defense stocks slipped on the initial news but rebounded after Trump proposed a $1.5 trillion defense budget for fiscal 2027. Morgan Stanley analyst Kristine Liwag described the plan as “carrots and sticks.” (Reuters)
The key factor now is the money lever. Buybacks, where a company buys back its own shares, boost earnings per share by cutting the number of shares outstanding. Dividends establish a baseline expectation, and investors typically react harshly to surprises on either front.
The order’s mechanics remain unclear, but the timeline is fixed. The Pentagon gets 30 days to pinpoint contractors violating the rules, and those companies then have 15 days to present board-approved remediation plans, per the order’s enforcement details.
Gabriel Rubin, in a Breakingviews column, suggested that Trump’s “detail-lite” declarations can push companies to revisit how they handle Washington risks, even if the legal basis is weak. He singled out RTX, noting that Trump’s attacks have targeted its Raytheon weapons division. (Reuters)
The broader market holds steady for now. The S&P 500 closed Friday at a record high, buoyed by chipmakers. Meanwhile, a weaker-than-expected U.S. jobs report barely moved the needle on bets for Federal Reserve rate cuts this year. (Reuters)
Monday for RTX could hinge more on headlines than on the fundamentals. Traders will be tuning in for details on how the administration intends to turn the order into concrete contract terms, and if any contractors hint at pausing buybacks to avoid scrutiny.
RTX has set a firm date. The company will release its fourth-quarter and full-year results on Jan. 27 before the market opens, followed by a conference call at 8:30 a.m. ET to cover the 2026 outlook. (RTX)
Analysts anticipate quarterly earnings of around $1.45 per share, with revenue projected near $22.65 billion, according to MarketBeat’s earnings preview. (MarketBeat)
The risk scenario is complicated. Should enforcement shift from talk to actual contract penalties, cash returns may shrink and the stock’s multiple could contract, even with steady demand. If the order stalls in court or is diluted in execution, pressure fades — though the uncertainty might persist.
U.S. markets reopen Monday, with all eyes on whether investors view RTX as a budget winner or a capital-returns loser. The next major event is Jan. 27, when RTX will report earnings and detail its 2026 strategy.
