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RTX, Lockheed (LMT) JV Wins Deal to Aid Javelin Weapon System
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RTX Corporation (RTX - Free Report) and Lockheed Martin Corp.’s (LMT - Free Report) joint venture (JV), Javelin, won a modification contract involving the Javelin weapon system. Work related to the deal is scheduled to be over by Nov 30, 2026.
Details of the Deal
Valued at $117 million, the contract was offered by the Army Contracting Command, Redstone Arsenal, AL. Per the terms of the deal, Javelin JV will procure lightweight command launch units for Javelin missiles. Work related to this deal will be carried out in Tucson, AZ.
Importance of Javelin
Javelin is the world's first one-man-portable, fire-and-forget, multipurpose missile system. This compact and lightweight missile enhances direct-fire capability against armored vehicles, buildings and field fortifications.
This combat-proven weapon system boasts a reliability rate of more than 94%. It can be deployed from multiple platforms and used in all weather, day or night operations. The system’s Command Launch Unit performs surveillance, allowing a gunner to see targets.
The fact that Javelin has been used in Afghanistan and Iraq in more than 5,000 engagements surely reflects the solid demand that it enjoys in the missile market. The latest contract win by RTX is a bright example of that and such contract wins tend to boost the company’s revenue growth in the coming quarters.
What’s Ahead?
Increasing geopolitical tensions worldwide have prompted nations to strengthen their defense systems manifold. 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 RTX being a prominent U.S. missile maker, the increased missile defense adoption by nations provides the company with solid growth opportunities.
Looking ahead, per a report by the Research and Markets firm, the global rocket and missile market is projected to witness a CAGR of 4.5% during the 2022-2030 period to reach $84.2 million by 2030.
Such massive growth projections indicate solid opportunities for RTX, which has a handful of combat proven missiles in its product portfolio, like Advanced Medium Range Air-to-Air Missile (AMRAAM), Guidance Enhanced Missile (GEM-T), the National Advanced Surface-to-Air Missile System (NASAMS), Tomahawk, Standard Missile 2 (SM-2) and a few more, in addition to the Javelin missile.
Peer Prospects
Considering the solid growth opportunities offered by the global rocket and missile market, other major defense primes like Northrop Grumman (NOC - Free Report) , Lockheed (LMT - Free Report) and Boeing (BA - Free Report) that specialize in developing technologically advanced missiles should also benefit.
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. In August 2022, the company had been chosen by the U.S. Missile Defense Agency to lead the Homeland Missile Defense Program.
NOC boasts a long-term earnings growth rate of 4.1%. The Zacks Consensus Estimate for its 2023 sales implies an improvement of 5.6% from the 2022 reported figure.
Lockheed’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, the Joint Air-to-Surface Standoff Missile and Javelin tactical missile programs alongside other tactical missiles.
LMT boasts a four-quarter average earnings surprise of 5.04%. The stock has a long-term earnings growth rate of 6.5%.
For almost 25 years, Boeing-built and supported air and missile defense systems have been protecting the nation, warfighters, allies and international partners against threats ranging from intercontinental ballistic missiles to hostile aircraft. BA’s missile and missile portfolio includes Aegis Ballistic Missile Defense, Avenger, Ground-Based Midcourse Defense and PAC-3 Missile Seeker.
The Zacks Consensus Estimate for Boeing’s 2023 sales indicates an improvement of 19.3% from the 2022 reported figure. The stock has a long-term earnings growth rate of 4%.
Price Performance
In the past year, RTX’s shares have lost 6.5% compared with the industry’s 6.4% decline.
Image Source: Zacks Investment Research
On the other hand, shares of Lockheed have rallied 4.1% against the industry's 6.4% decline in the past year.
Image: Bigstock
RTX, Lockheed (LMT) JV Wins Deal to Aid Javelin Weapon System
RTX Corporation (RTX - Free Report) and Lockheed Martin Corp.’s (LMT - Free Report) joint venture (JV), Javelin, won a modification contract involving the Javelin weapon system. Work related to the deal is scheduled to be over by Nov 30, 2026.
Details of the Deal
Valued at $117 million, the contract was offered by the Army Contracting Command, Redstone Arsenal, AL. Per the terms of the deal, Javelin JV will procure lightweight command launch units for Javelin missiles.
Work related to this deal will be carried out in Tucson, AZ.
Importance of Javelin
Javelin is the world's first one-man-portable, fire-and-forget, multipurpose missile system. This compact and lightweight missile enhances direct-fire capability against armored vehicles, buildings and field fortifications.
This combat-proven weapon system boasts a reliability rate of more than 94%. It can be deployed from multiple platforms and used in all weather, day or night operations. The system’s Command Launch Unit performs surveillance, allowing a gunner to see targets.
The fact that Javelin has been used in Afghanistan and Iraq in more than 5,000 engagements surely reflects the solid demand that it enjoys in the missile market. The latest contract win by RTX is a bright example of that and such contract wins tend to boost the company’s revenue growth in the coming quarters.
What’s Ahead?
Increasing geopolitical tensions worldwide have prompted nations to strengthen their defense systems manifold. 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 RTX being a prominent U.S. missile maker, the increased missile defense adoption by nations provides the company with solid growth opportunities.
Looking ahead, per a report by the Research and Markets firm, the global rocket and missile market is projected to witness a CAGR of 4.5% during the 2022-2030 period to reach $84.2 million by 2030.
Such massive growth projections indicate solid opportunities for RTX, which has a handful of combat proven missiles in its product portfolio, like Advanced Medium Range Air-to-Air Missile (AMRAAM), Guidance Enhanced Missile (GEM-T), the National Advanced Surface-to-Air Missile System (NASAMS), Tomahawk, Standard Missile 2 (SM-2) and a few more, in addition to the Javelin missile.
Peer Prospects
Considering the solid growth opportunities offered by the global rocket and missile market, other major defense primes like Northrop Grumman (NOC - Free Report) , Lockheed (LMT - Free Report) and Boeing (BA - Free Report) that specialize in developing technologically advanced missiles should also benefit.
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. In August 2022, the company had been chosen by the U.S. Missile Defense Agency to lead the Homeland Missile Defense Program.
NOC boasts a long-term earnings growth rate of 4.1%. The Zacks Consensus Estimate for its 2023 sales implies an improvement of 5.6% from the 2022 reported figure.
Lockheed’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, the Joint Air-to-Surface Standoff Missile and Javelin tactical missile programs alongside other tactical missiles.
LMT boasts a four-quarter average earnings surprise of 5.04%. The stock has a long-term earnings growth rate of 6.5%.
For almost 25 years, Boeing-built and supported air and missile defense systems have been protecting the nation, warfighters, allies and international partners against threats ranging from intercontinental ballistic missiles to hostile aircraft. BA’s missile and missile portfolio includes Aegis Ballistic Missile Defense, Avenger, Ground-Based Midcourse Defense and PAC-3 Missile Seeker.
The Zacks Consensus Estimate for Boeing’s 2023 sales indicates an improvement of 19.3% from the 2022 reported figure. The stock has a long-term earnings growth rate of 4%.
Price Performance
In the past year, RTX’s shares have lost 6.5% compared with the industry’s 6.4% decline.
Image Source: Zacks Investment Research
On the other hand, shares of Lockheed have rallied 4.1% against the industry's 6.4% decline in the past year.
Image Source: Zacks Investment Research
Zacks Rank
Both RTX and LMT currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.