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Raytheon (RTX) Set to Supply F-135 Propulsion Systems Parts
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Raytheon Technologies Corp.’s (RTX - Free Report) business unit, Pratt & Whitney, recently secured a modification contract involving F-135 propulsion systems. The award has been provided by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $18.7 million, the contract is projected to be completed by September 2025. Per the terms of the deal, Raytheon will procure long-lead materials, parts and components for F135 propulsion systems for F-35 Lighting II Joint Strike Fighter aircraft from the 17th lot.
A major portion of the work related to this deal will be carried out in Indianapolis, IN and Windsor Locks, CT. The contract will serve the non-U.S. Department of Defense (DOD) partners and Foreign Military Sales (FMS) customers.
Raytheon’s Growth Prospects
In recent times, combat aircraft are witnessing a surge in demand with the rapid rise in political risks and global terrorism. In this context, F-35 jets, built by America’s largest defense contractor, Lockheed Martin (LMT - Free Report) , enjoy a lucrative position in the combat aircraft arena and witness a steady flow of orders from the U.S. Army, seven international partner countries and eight FMS customers.
Lockheed Martin has delivered 841 F-35 airplanes since the program's inception, with 271 jets in the backlog as of September 2022. The strong international demand for F-35 in the first three quarters of 2022 resulted in multiple order wins for LMT and RTX.
The production of F-35 jets is expected to continue for many years, given the U.S. government's current inventory target of 2,456 aircraft for the Air Force, Marine Corps and Navy.
Consequently, Pratt & Whitney, which builds F-35’s engine, is expected to witness more order inflows for the F-35 engine and its propulsion system in the coming days. This should significantly bolster this defense contractor’s top line.
Benefits for Peers
Apart from Lockheed Martin and Raytheon, defense majors that stand to benefit from the expanding production rates of F-35 are as follows:
Northrop Grumman (NOC - Free Report) renders its expertise in carrier aircraft and low-observable stealth technology for the F-35 program. A pioneer in the development of manned combat aircraft, Northrop has a tradition of providing technological leadership in all aspects of military aviation and aircraft.
Northrop Grumman has a long-term earnings growth rate of 3.3%. NOC shares have gained 40.1% in the past year.
BAE Systems’ (BAESY - Free Report) short takeoff and vertical landing experience and air systems sustainment support F-35’s combat capabilities. The company provides an electronic warfare suite for F-35, which includes fully-integrated radar warning, targeting support and self-protection to detect and defeat surface and airborne threats.
BAE Systems boasts a long-term earnings growth rate of 13.2%. BAESY stock has appreciated 40.5% in the past year.
Price Movement
In the past year, shares of Raytheon Technologies have rallied 15.9% compared with the industry’s growth of 3.5%.
Image Source: Zacks Investment Research
Zacks Rank
Raytheon Technologies currently carries a Zacks Rank #4 (Sell).
Image: Bigstock
Raytheon (RTX) Set to Supply F-135 Propulsion Systems Parts
Raytheon Technologies Corp.’s (RTX - Free Report) business unit, Pratt & Whitney, recently secured a modification contract involving F-135 propulsion systems. The award has been provided by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $18.7 million, the contract is projected to be completed by September 2025. Per the terms of the deal, Raytheon will procure long-lead materials, parts and components for F135 propulsion systems for F-35 Lighting II Joint Strike Fighter aircraft from the 17th lot.
A major portion of the work related to this deal will be carried out in Indianapolis, IN and Windsor Locks, CT. The contract will serve the non-U.S. Department of Defense (DOD) partners and Foreign Military Sales (FMS) customers.
Raytheon’s Growth Prospects
In recent times, combat aircraft are witnessing a surge in demand with the rapid rise in political risks and global terrorism. In this context, F-35 jets, built by America’s largest defense contractor, Lockheed Martin (LMT - Free Report) , enjoy a lucrative position in the combat aircraft arena and witness a steady flow of orders from the U.S. Army, seven international partner countries and eight FMS customers.
Lockheed Martin has delivered 841 F-35 airplanes since the program's inception, with 271 jets in the backlog as of September 2022. The strong international demand for F-35 in the first three quarters of 2022 resulted in multiple order wins for LMT and RTX.
The production of F-35 jets is expected to continue for many years, given the U.S. government's current inventory target of 2,456 aircraft for the Air Force, Marine Corps and Navy.
Consequently, Pratt & Whitney, which builds F-35’s engine, is expected to witness more order inflows for the F-35 engine and its propulsion system in the coming days. This should significantly bolster this defense contractor’s top line.
Benefits for Peers
Apart from Lockheed Martin and Raytheon, defense majors that stand to benefit from the expanding production rates of F-35 are as follows:
Northrop Grumman (NOC - Free Report) renders its expertise in carrier aircraft and low-observable stealth technology for the F-35 program. A pioneer in the development of manned combat aircraft, Northrop has a tradition of providing technological leadership in all aspects of military aviation and aircraft.
Northrop Grumman has a long-term earnings growth rate of 3.3%. NOC shares have gained 40.1% in the past year.
BAE Systems’ (BAESY - Free Report) short takeoff and vertical landing experience and air systems sustainment support F-35’s combat capabilities. The company provides an electronic warfare suite for F-35, which includes fully-integrated radar warning, targeting support and self-protection to detect and defeat surface and airborne threats.
BAE Systems boasts a long-term earnings growth rate of 13.2%. BAESY stock has appreciated 40.5% in the past year.
Price Movement
In the past year, shares of Raytheon Technologies have rallied 15.9% compared with the industry’s growth of 3.5%.
Image Source: Zacks Investment Research
Zacks Rank
Raytheon Technologies currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.