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Raytheon (RTX) Wins $209M Deal for Naval Strike Missile
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Raytheon Technologies Corp.’s (RTX - Free Report) Missile & Defense segment recently clinched a contract for procuring the Naval Strike Missile Coastal Defense System. The award has been offered by the Naval Sea Systems Command, Washington Navy Yard, Washington, D.C.
Details of the Deal
Valued at $208.7 million, the contract is expected to be completed by September 2028. The deal will serve the Republic of Romania.
The majority of the work related to this deal will be carried out in Kongsberg, Norway. This contract will also include options, which on being exercised, will bring its cumulative value to $217 million.
Benefits of the Deal
Increasing geopolitical tensions worldwide have prompted nations to further strengthen their defense systems. With rapid technological upgrades, missile defense has steadily become pivotal in a nation’s defense strategy. With the United States being the world’s largest weapon supplier and Raytheon being a prominent U.S. missile maker, the increased missile defense adoption by nations provides the company with solid growth opportunities.
Notably, Raytheon’s Naval Strike Missile (NSM) is a long-range, precision strike weapon that seeks and destroys enemy ships at distances greater than 100 nautical miles. NSM uses an advanced seeker for precise targeting and carries a 500-pound class warhead with a programmable fuze. NSM is also suited for land attack missions because it can climb and descend with the terrain.
With such advanced weaponry in its portfolio, Raytheon enjoys solid demand in the defense space. The latest contract is a bright example of that, which, in turn, should boost its top-line growth.
Looking Ahead
Per a report by the Allied Market Research firm, the global rocket and missile market is projected to expand at a CAGR of 4.2% during the 2022-2031 period. Its earnings are expected to reach $82 billion by 2031. Such massive growth projections indicate solid opportunities for Raytheon Technologies, Northrop Grumman (NOC - Free Report) , Lockheed Martin (LMT - Free Report) and Boeing (BA - Free Report) , which specialize in developing technologically advanced missiles.
Northrop Grumman’s missile defense program includes AGM-88E advanced anti-radiation guided missiles, the Ground Based Strategic Deterrent weapon system and rocket propulsion systems.
Northrop boasts a four-quarter average earnings surprise of 0.15%. The stock has a long-term earnings growth rate of 3.3%.
Lockheed Martin’s missile defense program includes the Patriot Advanced Capability-3 (PAC-3) and Terminal High Altitude Area Defense air and missile defense programs. It also manufactures the Multiple Launch Rocket System, Joint Air-to-Surface Standoff Missile and Javelin tactical missile programs alongside other tactical missiles.
Lockheed boasts a four-quarter average earnings surprise of 5.62%. The stock has a long-term earnings growth rate of 6.2%.
Likewise, Boeing’s Integrated Air & Missile Defense portfolio includes Arrow 3, which provides it with regional missile defense capabilities to enable an effective response to short and medium-range ballistic missiles.
The Zacks Consensus Estimate for Boeing’s 2022 sales suggests an improvement of 6% over 2021’s reported figure. The stock has a long-term earnings growth rate of 4%.
Price Performance
In the past year, Raytheon Technologies’ shares have rallied 11.5% compared with the industry’s 2.2% growth.
Image Source: Zacks Investment Research
Zacks Rank
Raytheon Technologies carries a Zacks Rank #4 (Sell) at present.
Image: Bigstock
Raytheon (RTX) Wins $209M Deal for Naval Strike Missile
Raytheon Technologies Corp.’s (RTX - Free Report) Missile & Defense segment recently clinched a contract for procuring the Naval Strike Missile Coastal Defense System. The award has been offered by the Naval Sea Systems Command, Washington Navy Yard, Washington, D.C.
Details of the Deal
Valued at $208.7 million, the contract is expected to be completed by September 2028. The deal will serve the Republic of Romania.
The majority of the work related to this deal will be carried out in Kongsberg, Norway. This contract will also include options, which on being exercised, will bring its cumulative value to $217 million.
Benefits of the Deal
Increasing geopolitical tensions worldwide have prompted nations to further strengthen their defense systems. With rapid technological upgrades, missile defense has steadily become pivotal in a nation’s defense strategy. With the United States being the world’s largest weapon supplier and Raytheon being a prominent U.S. missile maker, the increased missile defense adoption by nations provides the company with solid growth opportunities.
Notably, Raytheon’s Naval Strike Missile (NSM) is a long-range, precision strike weapon that seeks and destroys enemy ships at distances greater than 100 nautical miles. NSM uses an advanced seeker for precise targeting and carries a 500-pound class warhead with a programmable fuze. NSM is also suited for land attack missions because it can climb and descend with the terrain.
With such advanced weaponry in its portfolio, Raytheon enjoys solid demand in the defense space. The latest contract is a bright example of that, which, in turn, should boost its top-line growth.
Looking Ahead
Per a report by the Allied Market Research firm, the global rocket and missile market is projected to expand at a CAGR of 4.2% during the 2022-2031 period. Its earnings are expected to reach $82 billion by 2031. Such massive growth projections indicate solid opportunities for Raytheon Technologies, Northrop Grumman (NOC - Free Report) , Lockheed Martin (LMT - Free Report) and Boeing (BA - Free Report) , which specialize in developing technologically advanced missiles.
Northrop Grumman’s missile defense program includes AGM-88E advanced anti-radiation guided missiles, the Ground Based Strategic Deterrent weapon system and rocket propulsion systems.
Northrop boasts a four-quarter average earnings surprise of 0.15%. The stock has a long-term earnings growth rate of 3.3%.
Lockheed Martin’s missile defense program includes the Patriot Advanced Capability-3 (PAC-3) and Terminal High Altitude Area Defense air and missile defense programs. It also manufactures the Multiple Launch Rocket System, Joint Air-to-Surface Standoff Missile and Javelin tactical missile programs alongside other tactical missiles.
Lockheed boasts a four-quarter average earnings surprise of 5.62%. The stock has a long-term earnings growth rate of 6.2%.
Likewise, Boeing’s Integrated Air & Missile Defense portfolio includes Arrow 3, which provides it with regional missile defense capabilities to enable an effective response to short and medium-range ballistic missiles.
The Zacks Consensus Estimate for Boeing’s 2022 sales suggests an improvement of 6% over 2021’s reported figure. The stock has a long-term earnings growth rate of 4%.
Price Performance
In the past year, Raytheon Technologies’ shares have rallied 11.5% compared with the industry’s 2.2% growth.
Image Source: Zacks Investment Research
Zacks Rank
Raytheon Technologies carries a Zacks Rank #4 (Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.