We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Raytheon (RTX) Wins $888M Deal to Aid F135 Propulsion System
Read MoreHide Full Article
Raytheon Technologies Corp.’s (RTX - Free Report) business unit, Pratt and Whitney, secured a modification contract involving F135 propulsion system. The award has been offered by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $887.9 million, the contract is expected to be completed by December 2026. Per the terms of the deal, Raytheon will procure spare parts, modules, support equipment/packaging handling shipping and transportation material as well as depot lay-in material for F135 propulsion system.
The contract will serve the U.S. Air Force, Marine Corps, Navy, Foreign Military Sales (FMS) customers and non-Department of Defense participants.
Work related to this deal will be executed in East Hartford, CT.
Raytheon’s Growth Prospects
Combat aircraft witnessed a surge in demand with the rapid rise in political risks and global terrorism. In this context, F-35 jets, built by America’s largest defense contractor, Lockheed Martin (LMT - Free Report) , enjoy a lucrative position in the combat aircraft arena. These jets also witness a steady flow of orders from the U.S. Army, seven international partner countries and eight FMS customers.
Lockheed has delivered 899 F-35 airplanes since the program's inception, with 340 jets in the backlog as of Mar 26, 2023. This reflects the solid demand that this jet program enjoys in the defense space, resulting in multiple order wins for both LMT and RTX. The latest contract win is a bright example of that.
The production of F-35 jets is expected to continue for several years, given the U.S. government's current inventory target of 2,456 aircraft for the Air Force, Marine Corps and Navy.
Consequently, Pratt & Whitney, which builds F-35’s engine, is likely to witness more order inflows for the F-35 engine and its propulsion system in the coming days, like the latest one. This should significantly bolster this defense contractor’s top line.
Peer Growth
Apart from Lockheed and Raytheon, defense majors that stand to benefit from the expanding production rates of F-35 are:
Northrop Grumman (NOC - Free Report) : The company renders its expertise in carrier aircraft and low-observable stealth technology for the F-35 program. A pioneer in the development of manned combat aircraft, NOC has a tradition of providing technological leadership in all aspects of military aviation and aircraft.
Northrop Grumman has a long-term earnings growth rate of 3.8%. The Zacks Consensus Estimate for NOC’s 2023 sales indicates a year-over-year improvement of 4.7%.
BAE Systems’ (BAESY - Free Report) : This defense major’s short takeoff and vertical landing experience, along with air systems sustainment, support F-35’s combat capabilities. The company provides an electronic warfare suite for F-35, which includes fully integrated radar warning (targeting support and self-protection) to detect and defeat surface and airborne threats.
BAE Systems boasts a long-term earnings growth rate of 13.7%. The Zacks Consensus Estimate for BAESY’s 2023 sales indicates an increase of 25.4% from the previous year’s reported figure.
Price Movement
In the past year, shares of Raytheon have risen 8.1% compared with the industry’s growth of 8.9%.
Image: Bigstock
Raytheon (RTX) Wins $888M Deal to Aid F135 Propulsion System
Raytheon Technologies Corp.’s (RTX - Free Report) business unit, Pratt and Whitney, secured a modification contract involving F135 propulsion system. The award has been offered by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $887.9 million, the contract is expected to be completed by December 2026. Per the terms of the deal, Raytheon will procure spare parts, modules, support equipment/packaging handling shipping and transportation material as well as depot lay-in material for F135 propulsion system.
The contract will serve the U.S. Air Force, Marine Corps, Navy, Foreign Military Sales (FMS) customers and non-Department of Defense participants.
Work related to this deal will be executed in East Hartford, CT.
Raytheon’s Growth Prospects
Combat aircraft witnessed a surge in demand with the rapid rise in political risks and global terrorism. In this context, F-35 jets, built by America’s largest defense contractor, Lockheed Martin (LMT - Free Report) , enjoy a lucrative position in the combat aircraft arena. These jets also witness a steady flow of orders from the U.S. Army, seven international partner countries and eight FMS customers.
Lockheed has delivered 899 F-35 airplanes since the program's inception, with 340 jets in the backlog as of Mar 26, 2023. This reflects the solid demand that this jet program enjoys in the defense space, resulting in multiple order wins for both LMT and RTX. The latest contract win is a bright example of that.
The production of F-35 jets is expected to continue for several years, given the U.S. government's current inventory target of 2,456 aircraft for the Air Force, Marine Corps and Navy.
Consequently, Pratt & Whitney, which builds F-35’s engine, is likely to witness more order inflows for the F-35 engine and its propulsion system in the coming days, like the latest one. This should significantly bolster this defense contractor’s top line.
Peer Growth
Apart from Lockheed and Raytheon, defense majors that stand to benefit from the expanding production rates of F-35 are:
Northrop Grumman (NOC - Free Report) : The company renders its expertise in carrier aircraft and low-observable stealth technology for the F-35 program. A pioneer in the development of manned combat aircraft, NOC has a tradition of providing technological leadership in all aspects of military aviation and aircraft.
Northrop Grumman has a long-term earnings growth rate of 3.8%. The Zacks Consensus Estimate for NOC’s 2023 sales indicates a year-over-year improvement of 4.7%.
BAE Systems’ (BAESY - Free Report) : This defense major’s short takeoff and vertical landing experience, along with air systems sustainment, support F-35’s combat capabilities. The company provides an electronic warfare suite for F-35, which includes fully integrated radar warning (targeting support and self-protection) to detect and defeat surface and airborne threats.
BAE Systems boasts a long-term earnings growth rate of 13.7%. The Zacks Consensus Estimate for BAESY’s 2023 sales indicates an increase of 25.4% from the previous year’s reported figure.
Price Movement
In the past year, shares of Raytheon have risen 8.1% compared with the industry’s growth of 8.9%.
Image Source: Zacks Investment Research
Zacks Rank
Raytheon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.