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Raytheon Clinches $36M Deal to Support APG-79 Radar System
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Raytheon Company recently secured a $35.5-million deal to deliver spare parts of the APG-79 Radar System. The contract was awarded by the Defense Logistics Agency Aviation, Philadelphia, PA. Work related to the deal will get executed in California and is expected to be completed by Jul 31, 2021. Raytheon will utilize fiscal 2018 Navy working capital funds for completing the task.
A Brief Note on the APG-79 Radar System
The combat-proven APG-79 AESA radar system substantially increases the power of the U.S. Navy's F/A-18E/F Super Hornet and the F/A-18 Classic Hornet by providing active electronic beam scanning that allows the radar beam to be steered at enormous speeds. Further, its agile beam enables the multimode radar to interleave in near-real time, so pilots and crew can use both modes, simultaneously. The radar system also optimizes situational awareness and provides superior air-to-air and air-to-surface capabilities.
What Favors Raytheon?
Per Markets and Markets Research firm, the electronically scanned arrays market is expected to see a CAGR of 6.20% to $8.43 billion by 2021, from 2016. Such growth can be attributed to factors such as the replacement of traditional electronically scanned array systems and integration of active electronically scanned arrays with traditional radar system components. This, in turn, will further lead to the increasing demand for its spare parts, components and technical services, thereby boosting growth prospects of defense contractors like Raytheon in this market, going ahead.
Also, in recent times, Raytheon has witnessed significant radar-related success from major investments, including those made in Gallium Nitride (GaN), which helps in amplifying radio energy for radars, jammers and other devices.
Meanwhile, Raytheon’s Space and Airborne System (SAS) business unit, which manufactures other combat-proven radars and sensors along with the AESA Radar system, significantly helps in driving the company’s overall top line. This is evident from the division’s second-quarter 2018 revenues that accounted for 24.2% of the company’s total sales. In sync with this, we may expect the recently won contract to add further impetus to this unit’s top-line growth, going ahead.
Price Movement
Raytheon’s stock has gained 8.5% in the past 12 months compared with the industry’s growth of 18.1%. The underperformance may have been caused due to tough competition that the company faces in the defense market.
Zacks Rank & Stocks to Consider
Raytheon currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the same sector are Aerojet Rocketdyne Holdings , Engility Holdings and Huntington Ingalls Industries (HII - Free Report) .
Aerojet Rocketdyne came up with an average positive earnings surprise of 9.27% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen 30.9% to $1.27 in the last 90 days.
Engility Holdings delivered an average positive earnings surprise of 19% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has moved up 16.1% to $2.02 in the last 90 days.
Huntington Ingalls pulled off an average positive earnings surprise of 9.48% in the trailing four quarters. The Zacks Consensus Estimate for 2018 earnings has moved 6.4% north to $17.24 in the last 90 days.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Raytheon Clinches $36M Deal to Support APG-79 Radar System
Raytheon Company recently secured a $35.5-million deal to deliver spare parts of the APG-79 Radar System. The contract was awarded by the Defense Logistics Agency Aviation, Philadelphia, PA. Work related to the deal will get executed in California and is expected to be completed by Jul 31, 2021. Raytheon will utilize fiscal 2018 Navy working capital funds for completing the task.
A Brief Note on the APG-79 Radar System
The combat-proven APG-79 AESA radar system substantially increases the power of the U.S. Navy's F/A-18E/F Super Hornet and the F/A-18 Classic Hornet by providing active electronic beam scanning that allows the radar beam to be steered at enormous speeds. Further, its agile beam enables the multimode radar to interleave in near-real time, so pilots and crew can use both modes, simultaneously. The radar system also optimizes situational awareness and provides superior air-to-air and air-to-surface capabilities.
What Favors Raytheon?
Per Markets and Markets Research firm, the electronically scanned arrays market is expected to see a CAGR of 6.20% to $8.43 billion by 2021, from 2016. Such growth can be attributed to factors such as the replacement of traditional electronically scanned array systems and integration of active electronically scanned arrays with traditional radar system components. This, in turn, will further lead to the increasing demand for its spare parts, components and technical services, thereby boosting growth prospects of defense contractors like Raytheon in this market, going ahead.
Also, in recent times, Raytheon has witnessed significant radar-related success from major investments, including those made in Gallium Nitride (GaN), which helps in amplifying radio energy for radars, jammers and other devices.
Meanwhile, Raytheon’s Space and Airborne System (SAS) business unit, which manufactures other combat-proven radars and sensors along with the AESA Radar system, significantly helps in driving the company’s overall top line. This is evident from the division’s second-quarter 2018 revenues that accounted for 24.2% of the company’s total sales. In sync with this, we may expect the recently won contract to add further impetus to this unit’s top-line growth, going ahead.
Price Movement
Raytheon’s stock has gained 8.5% in the past 12 months compared with the industry’s growth of 18.1%. The underperformance may have been caused due to tough competition that the company faces in the defense market.
Zacks Rank & Stocks to Consider
Raytheon currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the same sector are Aerojet Rocketdyne Holdings , Engility Holdings and Huntington Ingalls Industries (HII - Free Report) .
While Aerojet Rocketdyne sports a Zacks Rank #1 (Strong Buy), Engility and Huntington Ingalls both carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Aerojet Rocketdyne came up with an average positive earnings surprise of 9.27% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen 30.9% to $1.27 in the last 90 days.
Engility Holdings delivered an average positive earnings surprise of 19% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has moved up 16.1% to $2.02 in the last 90 days.
Huntington Ingalls pulled off an average positive earnings surprise of 9.48% in the trailing four quarters. The Zacks Consensus Estimate for 2018 earnings has moved 6.4% north to $17.24 in the last 90 days.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>