Raytheon Technologies Corp.’s (RTX - Free Report) Pratt and Whitney Military Engines unit recently clinched a contract for delivering propulsion system spare parts, spare engines and modules, in support of the F-135 propulsion initial spares requirements. The deal has been awarded by the Air Systems Command, Patuxent River, MD.
Valued at $579.8 million, the contract is projected to be completed by December 2024.
F-135 Attributes & Jet Demand
Pratt & Whitney's F135 propulsion system powers all the three variants of F-35, the combat-proven fighter jet fighter developed by defense major Lockheed Martin (LMT - Free Report) , with BAE Systems (BAESY - Free Report) and Northrop Grumman (NOC - Free Report) being the co-manufacturers. Notably, F135 is the world’s most advanced fighter engine, delivering more than 40,000 lbs. of thrust and unmatched advances in safety, design, performance, and reliability.
Rising security threat from terrorist activities and adverse geopolitical situations have resulted in increased demand for defense products, of which combat aircraft constitutes a major portion. Given F-35’s advanced stealth capabilities, combined with fighter aircraft speed and agility, F-35 jet dominates the combat aircraft market.
Consequently, rise in F-35 demand has boosted the need for its F-135 propulsion systems, which is well reflected in the latest deal won by Raytheon Technologies.
How Will this Deal Aid Raytheon Technologies?
Thanks to its wide range of combat-proven defense products, Raytheon Technologies continues to receive ample orders from the Pentagon and its foreign allies. During the second quarter, the company won a handful of notable contracts. Consequently, it witnessed record bookings of $10.16 billion, which translated into a solid backlog of $73.13 billion by the end of the second quarter.
These impressive results make us optimistic of the revenue growth prospects of the company, which, in turn, will boost its bottom line, over the long run. Impressively the latest contract win will enable this defense major to boast similar record backlog in the coming days as well, thereby bolstering its growth trajectory.
Production of F-35 jets is expected to continue steadily over the long run, given the U.S. government's current inventory target of 2,456 aircraft for the Air Force, Marine Corps and Navy. Consequently, Raytheon Technologies is also expected to witness more order inflows for its F-135 propulsion systems, as increasing number of jets will boost the need for propulsion systems. This in turn should bolster Raytheon Technologies’ top line.
Price Performance & Zacks Rank
Raytheon Technologies’ stock has lost 13.3% in the last three months compared with the industry’s decline of 8.5%.
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, SherazMian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
Click Here, See It Free >>