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Raytheon (RTX) Wins $1.2B Deal for PATRIOT Missile System
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Raytheon Technologies Corp. (RTX - Free Report) recently secured a contract involving PATRIOT Missile System. The award has been offered by the U.S. Army Contracting Command, Redstone Arsenal, Al.
Details of the Deal
Valued at $1.23 billion, the contract is projected to be completed by Dec 31, 2032. Per the terms of the deal, Raytheon will supply fire units for PATRIOT Missile System.
Work related to this deal will be executed in Andover and Tewksbury, MA; West Plains, MO; Manchester, NH; Las Cruces, NM; Chambersburg, PA; Altenstadt, Germany; and Switzerland.
Importance of PATRIOT
PATRIOT is a long-range, high-altitude all-weather missile defense system, designed to counter threats from tactical ballistic missiles, cruise missiles and advanced fighter aircraft. The system consists of radars, command-and-control technology and other multiple interceptors. It is designed and engineered to detect tactical ballistic missiles, cruise missiles, drones, advanced aircraft and other threats.
Raytheon also designs the popular PATRIOT missile defense interceptors and has been consistently focusing on upgrading this defense system in order to keep pace with the changing dynamics of modern warfare.
Since its launch, PATRIOT has been used by five nations in more than 250 combat engagements against manned and unmanned aircraft, cruise missiles and tactical ballistic missiles. Beginning January 2015, the missile defense system has intercepted more than 150 ballistic missiles in combat operations around the world. More than 90 of those intercepts involved the low-cost Raytheon Missiles & Defense-made Guidance Enhanced Missile family of surface-to-air missiles. Currently, PATRIOT is the foundation of integrated air and missile defense system for 17 nations. This surely reflects the solid demand that the system enjoys in the missile defense market. The latest contract win is a testament to that.
Growth Prospects
Per the reports from Markets and Markets, the global missile defense system market is expected to witness a CAGR of 3.9% during 2021-2026. Considering the expanding size of the aforementioned market and the fortifying defense spending worldwide, defense companies like Raytheon, with a comprehensive portfolio of missile defense products, stand to benefit from the increasing demand.
In this regard, companies other than RTX that may benefit from the surging demand for missiles products are:
Northrop Grumman (NOC - Free Report) designs and produces missile products, including advanced high-speed propulsion systems, fuses, warheads, etc.
The company has a long-term earnings growth of 3.5%. The Zacks Consensus Estimate for NOC’s 2023 sales indicates a 4.6% increase from the prior-year reported figure.
Lockheed Martin’s (LMT - Free Report) Missiles and Fire Control business unit develops, manufactures and supports advanced combat, missile, rocket, manned and unmanned systems for military customers. Some of its products are the PAC-3 family of missiles, M270, RRPR, THHAD, etc.
LMT has a long-term earnings growth of 6.9%. Shares of the company have increased 5.7% in the past year.
General Dynamics’ (GD - Free Report) Ordnance and Tactical Systems (“OTS”) designs, develops and produces a comprehensive range of sophisticated weapon systems for ground forces. The unit also produces next-generation weapon systems for shipboard and aircraft applications. OTS holds a leading position in providing missile subsystems for U.S. tactical and strategic missiles.
GD boasts a long-term earnings growth of 8.6%. The Zacks Consensus Estimate for the company’s 2023 sales indicates a 4.4% increase from the prior-year reported figure.
Price Movement
In the past six months, shares of Raytheon Technologies have rallied 18.3% compared with the industry’s 22.1% growth.
Image: Bigstock
Raytheon (RTX) Wins $1.2B Deal for PATRIOT Missile System
Raytheon Technologies Corp. (RTX - Free Report) recently secured a contract involving PATRIOT Missile System. The award has been offered by the U.S. Army Contracting Command, Redstone Arsenal, Al.
Details of the Deal
Valued at $1.23 billion, the contract is projected to be completed by Dec 31, 2032. Per the terms of the deal, Raytheon will supply fire units for PATRIOT Missile System.
Work related to this deal will be executed in Andover and Tewksbury, MA; West Plains, MO; Manchester, NH; Las Cruces, NM; Chambersburg, PA; Altenstadt, Germany; and Switzerland.
Importance of PATRIOT
PATRIOT is a long-range, high-altitude all-weather missile defense system, designed to counter threats from tactical ballistic missiles, cruise missiles and advanced fighter aircraft. The system consists of radars, command-and-control technology and other multiple interceptors. It is designed and engineered to detect tactical ballistic missiles, cruise missiles, drones, advanced aircraft and other threats.
Raytheon also designs the popular PATRIOT missile defense interceptors and has been consistently focusing on upgrading this defense system in order to keep pace with the changing dynamics of modern warfare.
Since its launch, PATRIOT has been used by five nations in more than 250 combat engagements against manned and unmanned aircraft, cruise missiles and tactical ballistic missiles. Beginning January 2015, the missile defense system has intercepted more than 150 ballistic missiles in combat operations around the world. More than 90 of those intercepts involved the low-cost Raytheon Missiles & Defense-made Guidance Enhanced Missile family of surface-to-air missiles. Currently, PATRIOT is the foundation of integrated air and missile defense system for 17 nations. This surely reflects the solid demand that the system enjoys in the missile defense market. The latest contract win is a testament to that.
Growth Prospects
Per the reports from Markets and Markets, the global missile defense system market is expected to witness a CAGR of 3.9% during 2021-2026. Considering the expanding size of the aforementioned market and the fortifying defense spending worldwide, defense companies like Raytheon, with a comprehensive portfolio of missile defense products, stand to benefit from the increasing demand.
In this regard, companies other than RTX that may benefit from the surging demand for missiles products are:
Northrop Grumman (NOC - Free Report) designs and produces missile products, including advanced high-speed propulsion systems, fuses, warheads, etc.
The company has a long-term earnings growth of 3.5%. The Zacks Consensus Estimate for NOC’s 2023 sales indicates a 4.6% increase from the prior-year reported figure.
Lockheed Martin’s (LMT - Free Report) Missiles and Fire Control business unit develops, manufactures and supports advanced combat, missile, rocket, manned and unmanned systems for military customers. Some of its products are the PAC-3 family of missiles, M270, RRPR, THHAD, etc.
LMT has a long-term earnings growth of 6.9%. Shares of the company have increased 5.7% in the past year.
General Dynamics’ (GD - Free Report) Ordnance and Tactical Systems (“OTS”) designs, develops and produces a comprehensive range of sophisticated weapon systems for ground forces. The unit also produces next-generation weapon systems for shipboard and aircraft applications. OTS holds a leading position in providing missile subsystems for U.S. tactical and strategic missiles.
GD boasts a long-term earnings growth of 8.6%. The Zacks Consensus Estimate for the company’s 2023 sales indicates a 4.4% increase from the prior-year reported figure.
Price Movement
In the past six months, shares of Raytheon Technologies have rallied 18.3% compared with the industry’s 22.1% growth.
Image Source: Zacks Investment Research
Zacks Rank
Raytheon Technologies currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.