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Raytheon (RTX) Unit Wins $423M Deal for AN/SPY-6(V) Radars

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Raytheon Technologies Corp.'s (RTX - Free Report) business segment, Missiles & Defense, recently secured a modification contract involving the AN/SPY-6(V) family of radars. The Naval Sea Systems Command, Washington, D.C. offered the award.

Details of the Deal

Valued at $422.6 million, the contract is expected to be complete by September 2025. Per the terms of the deal, Raytheon will exercise options for the hardware production of the AN/SPY-6(V) family of radars.

The majority of work related to this deal will be carried out in Andover, MA; Scottsdale, AZ; San Diego, CA and Sykesville, MD.

Radars & Raytheon

With the rapid escalation of geopolitical tensions globally in recent times, developed and developing nations have been boosting their defense arsenal significantly. Radars constitute a vital part of this arsenal.

The demand for military radar systems has expanded manifold in recent times, driven by factors like the rise in the defense spending of emerging economies, an increase in regional tensions and intercountry conflicts that have boosted threats of missiles and aircraft. This, in turn, has been benefiting radar manufacturing companies like RTX in the form of contract wins, like the latest one.

Raytheon's product portfolio consists of varied radars like integrated air and missile defense radars, ballistic missile radars, surveillance radars and air dominance radars. Radars like AN-SPY 6, AN-TPY-2, APG-79, and APG-82 are some of its combat-proven products that enjoy solid demand in the global military radar market.

Growth Prospects

Per the Fortune Business Insights report, the global military radar market is expected to reach $22.06 billion by 2028 at a CAGR of 6.3% from 2021. Such growth projections bode well for prominent radar manufacturers like Raytheon Technologies, Lockheed Martin (LMT - Free Report) , L3Harris Technologies (LHX - Free Report) and Northrop Grumman (NOC - Free Report) .

Lockheed's product portfolio includes various radar and electro-optical/infrared sensor systems like the AN/APY-9 radar, airborne ground surveillance radar systems, the IRST21 Sensos system, AN/TPQ-53 radar systems, SPY-7, the long-range discrimination radar and a few more.

Lockheed boasts a long-term earnings growth rate of 5.7%. The Zacks Consensus Estimate for LMT's 2022 earnings implies an improvement of 18.6% from the 2021-reported figure.

L3Harris manufactures combat-proven radars like SPS-48, land-based surveillance radars, the AN/APY-11 Multimode radar, the Tactical Air Surveillance radar, the AN/SPS-48G Long-range 3D surveillance radar and many more.

L3Harris boasts a long-term earnings growth rate of 4.4%. The Zacks Consensus Estimate for LHX's 2022 earnings implies an improvement of 5.1% from the 2021-reported figure.

Northrop's broad portfolio of products comprises radars like the AN/APG-83 scalable agile beam radar, the AN/ASQ-236 Dragon???s eye radar pod as well as AN/APG-81 and AN/APG-71 for the F-35 and F-22 jets, respectively.

Northrop boasts a long-term earnings growth rate of 6.1%. The Zacks Consensus Estimate for NOC's 2022 sales implies an improvement of 2.7% from the 2021-reported figure.

Zacks Rank and Price Performance

Raytheon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The company's shares have rallied 8% in the past year against the industry's 1.9% decline.

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