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Raytheon (RTX) Wins $113M Deal to Support RAM Block 2 GMRP

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Raytheon Technologies, Inc.'s (RTX - Free Report) business unit, Missiles and Defense, recently secured a modification contract involving the Rolling Airframe Missile (RAM) Block 2 guided-missile round pack (GMRP). The deal has been awarded by the Naval Sea Systems Command, Washington, D.C. It is a Foreign Military Sales (FMS) deal that will serve Egypt.

Valued at $112.7 million, the contract is scheduled to be completed by December 2024. Per the terms of the agreement, Raytheon will perform Navy transition involving production efforts for RAM Block 2B and exercise options.

Majority of the work related to this deal will be carried out in Tucson, AZ.

Importance of RAM

The RAM guided missile weapon system is the world's most modern ship self-defense weapon that has been designed to destroy anti-ship missiles. It is currently deployed on more than 165 ships in 11 countries, ranging from 500-ton fast attack craft to 95,000-ton aircraft carriers.
Its Block 2 variant represents the latest evolution in the development of the RAM missile, which makes the missile two and a half times more maneuverable, with one and a half times the effective intercept range.

Raytheon’s Missile Strength

Raytheon Missiles & Defense (RMD) is a leading designer, developer, integrator producer and sustainer of integrated air and missile defense systems, with the unit serving as a prime contractor or major subcontractor on numerous missile and related programs with the U.S. Department of Defense (DoD).

Its expertise in manufacturing combat proven missiles has been consistently boosting performance of the RMD unit. The latest contract win will  bolster this unit’s performance in the coming days.

Budget Aiding Growth Prospects

The U.S. fiscal 2022 defense budget proposal provisioned $20.4 billion for investments in missile defense. This should enable Raytheon Technologies to clinch more contracts related to missile defense systems and associated services, considering the company’s proven expertise in varied missile systems. In fact, the DoD has requested investment worth $609 million for purchasing Raytheon’s long-range stand-off (LRSO) missile.

Other major missile defense players like Northrop (NOC - Free Report) , Boeing (BA - Free Report) and Lockheed Martin (LMT - Free Report) are also expected to benefit from the aforementioned budget provision.

Price Performance and Zacks Rank

Raytheon Technologies, a Zacks Rank #3 (Hold) stock, has gained 24.1% in the past year compared with the industry’s growth of 14.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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