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Raytheon's (RTX) Arm Wins $291M Deal to Support F-35 Program
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Raytheon Technologies Corp.’s (RTX - Free Report) business segment, Pratt and Whitney, recently secured a contract involving supply of propulsion system for Lockheed’s (LMT - Free Report) F-35 jet program. The deal has been awarded by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $290.7 million, the contract is expected to be completed by January 2024. Per the terms, Pratt and Whitney will offer material and support equipment for depot maintenance facilities, program administrative labor for non-recurring sustainment activities, mockup engines and modules for test cells to support F-35’s propulsion system.
Majority of the work related to the deal will be executed in Oklahoma City, OK; East Hartford, CT and Cherry Point, NC.
Significance of F-35 & Pratt and Whitney
Over the past decade, a rapid rise in global terrorism and adverse geopolitical situations across borders has boosted demand for defense products, with combat aircraft constituting a major portion of that portfolio. Notably, F-35 jets being supported by an international team of leading aerospace majors, such as Northrop Grumman (NOC - Free Report) , BAE Systems (BAESY - Free Report) and Pratt & Whitney, hold a significant position in the military aircraft market. A major benefit of F-35 is its stealth capability, which prevents enemy forces from detecting and targeting the plane.
In particular, Pratt and Whitney, which is a world leader in the design and manufacture of next generation propulsion technology, supplies F135 engine that powers all three variants of the F-35 fighter jets.
Therefore, as the F-35 jet continues to dominate the combat aircraft market, Pratt & Whitney stands to benefit in the form of order flow involving its propulsion systems. The latest contract win is bright example of that.
Growth Prospects
F-35 has been a major growth driver for Pratt and Whitney. In the fourth quarter of 2020, Raytheon Technologies’ defense sales witnessed organic growth of 7% year over year driven by F-35.
Looking ahead, 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, we expect Pratt and Whitney to witness more order inflows for supplying and maintenance of F-35’s propulsion system, like the latest one, which in turn should bolster Raytheon Technologies’ top line.
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Raytheon's (RTX) Arm Wins $291M Deal to Support F-35 Program
Raytheon Technologies Corp.’s (RTX - Free Report) business segment, Pratt and Whitney, recently secured a contract involving supply of propulsion system for Lockheed’s (LMT - Free Report) F-35 jet program. The deal has been awarded by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $290.7 million, the contract is expected to be completed by January 2024. Per the terms, Pratt and Whitney will offer material and support equipment for depot maintenance facilities, program administrative labor for non-recurring sustainment activities, mockup engines and modules for test cells to support F-35’s propulsion system.
Majority of the work related to the deal will be executed in Oklahoma City, OK; East Hartford, CT and Cherry Point, NC.
Significance of F-35 & Pratt and Whitney
Over the past decade, a rapid rise in global terrorism and adverse geopolitical situations across borders has boosted demand for defense products, with combat aircraft constituting a major portion of that portfolio. Notably, F-35 jets being supported by an international team of leading aerospace majors, such as Northrop Grumman (NOC - Free Report) , BAE Systems (BAESY - Free Report) and Pratt & Whitney, hold a significant position in the military aircraft market. A major benefit of F-35 is its stealth capability, which prevents enemy forces from detecting and targeting the plane.
In particular, Pratt and Whitney, which is a world leader in the design and manufacture of next generation propulsion technology, supplies F135 engine that powers all three variants of the F-35 fighter jets.
Therefore, as the F-35 jet continues to dominate the combat aircraft market, Pratt & Whitney stands to benefit in the form of order flow involving its propulsion systems. The latest contract win is bright example of that.
Growth Prospects
F-35 has been a major growth driver for Pratt and Whitney. In the fourth quarter of 2020, Raytheon Technologies’ defense sales witnessed organic growth of 7% year over year driven by F-35.
Looking ahead, 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, we expect Pratt and Whitney to witness more order inflows for supplying and maintenance of F-35’s propulsion system, like the latest one, which in turn should bolster Raytheon Technologies’ top line.
Price Movement and Zacks Rank
Shares of this Zacks Rank #3 (Hold) company have gained 18.2% in the past year compared with the industry’s surge of 23.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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