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RTX Secures $277M Contract for Excalibur 155 mm Projectiles
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RTX Corporation’s (RTX - Free Report) business segment, Raytheon Missiles & Defense (“RMD”), recently clinched a modification contract for procuring 155mm projectiles. The award has been offered by the Army Contracting Command, Newark, NJ.
Valued at $276.5 million, the contract is expected to be completed by Apr 29, 2024. Work related to this deal will be carried out in different locations across the United States.
Benefits of 155mm Projectiles
Excalibur 155 mm projectile is an extended range guided artillery shell that accurately extends the reach of .39-caliber artillery to 40 km and .52-caliber artillery to more than 50 km. Its overall precision, coupled with the ability to be integrated on multiple gun systems, enables both the United States and its coalition partners provide overmatch capabilities against land targets in a variety of combat environments, including stationary land targets.
This weapon is fully qualified in multiple systems, including the M777, M109 series, M198, the Archer and PzH2000. It’s also currently compatible with the AS90, K9, DENEL G6 and CAESAR 6x6 systems.
Due to its variety of advantages, nations like Sweden, Canada, Australia, Jordan, India and the Netherlands have already chosen the Excalibur precision-guided projectile to address vital security interests, while several other international militaries are finalizing procurement plans. This surely reflects the solid demand that this weapon system enjoys in the artillery market, which in turn leads to inflow of contracts for RTX, the latest contract win being a bright example of that.
Looking ahead
Increasing geo-political tensions across the globe have prompted nations to strengthen their defense systems manifold, with artillery forces being one of them.
Increasing military investments in the development of new and advanced artillery system are being witnessed lately, thereby bolstering the artillery market’s prospects. Notably, as per the Mordor Intelligence firm’s forecast, the global artillery systems market is projected to witness a CAGR of 7.2% in the 2023-2028 period. This should benefit RTX Corp. with its 155 mm projectile having the capacity to increase precision, minimize collateral damage and reduce the logistical burden for artillery forces.
Peer Prospects
Other defense majors that should benefit from the growing artillery market are:
BAE Systems (BAESY - Free Report) : It is the co-developer of Excalibur 155 mm projectile, along with RTX. The company also builds L31 High Explosive 105mm shell, which is designed for use with the BAE Systems 105mm Light Gun L118. This shell has a 25% greater lethal area. It is combat proven and in service with the British Army and many other armies worldwide.
BAESY boasts a long-term earnings growth rate of 14%. The Zacks Consensus Estimate for BAESY’s 2023 sales indicates an improvement of 15.7% from the 2022 reported figure.
General Dynamics (GD - Free Report) : It designs and manufactures a wide range of armaments and ammunition such as the towed 155mm caliber 52-howitzer system SIAC, in artillery. SIAC’s advanced design meets the most demanding requirements of modern field artillery and coastal defense missions.
GD boasts a long-term earnings growth rate of 8.9%. The consensus estimate for GD’s 2023 sales indicates an improvement of 7.3% from the 2022 reported figure.
Lockheed Martin (LMT - Free Report) : Its HIMARS is the most technically advanced, affordable and sustainable artillery solution. HIMARS carries a six-pack of GMLRS rockets or one TACMS missile, and is designed to launch the entire MLRS family of munitions.
LMT boasts a long-term earnings growth rate of 6.5%. The consensus mark for LMT’s 2023 sales indicates an improvement of 0.9% from the 2022 reported figure.
Price Movement
In the past year, shares of RTX have lost 1.8% compared with the industry’s decline of 2.8%.
Image: Bigstock
RTX Secures $277M Contract for Excalibur 155 mm Projectiles
RTX Corporation’s (RTX - Free Report) business segment, Raytheon Missiles & Defense (“RMD”), recently clinched a modification contract for procuring 155mm projectiles. The award has been offered by the Army Contracting Command, Newark, NJ.
Valued at $276.5 million, the contract is expected to be completed by Apr 29, 2024. Work related to this deal will be carried out in different locations across the United States.
Benefits of 155mm Projectiles
Excalibur 155 mm projectile is an extended range guided artillery shell that accurately extends the reach of .39-caliber artillery to 40 km and .52-caliber artillery to more than 50 km. Its overall precision, coupled with the ability to be integrated on multiple gun systems, enables both the United States and its coalition partners provide overmatch capabilities against land targets in a variety of combat environments, including stationary land targets.
This weapon is fully qualified in multiple systems, including the M777, M109 series, M198, the Archer and PzH2000. It’s also currently compatible with the AS90, K9, DENEL G6 and CAESAR 6x6 systems.
Due to its variety of advantages, nations like Sweden, Canada, Australia, Jordan, India and the Netherlands have already chosen the Excalibur precision-guided projectile to address vital security interests, while several other international militaries are finalizing procurement plans. This surely reflects the solid demand that this weapon system enjoys in the artillery market, which in turn leads to inflow of contracts for RTX, the latest contract win being a bright example of that.
Looking ahead
Increasing geo-political tensions across the globe have prompted nations to strengthen their defense systems manifold, with artillery forces being one of them.
Increasing military investments in the development of new and advanced artillery system are being witnessed lately, thereby bolstering the artillery market’s prospects. Notably, as per the Mordor Intelligence firm’s forecast, the global artillery systems market is projected to witness a CAGR of 7.2% in the 2023-2028 period. This should benefit RTX Corp. with its 155 mm projectile having the capacity to increase precision, minimize collateral damage and reduce the logistical burden for artillery forces.
Peer Prospects
Other defense majors that should benefit from the growing artillery market are:
BAE Systems (BAESY - Free Report) : It is the co-developer of Excalibur 155 mm projectile, along with RTX. The company also builds L31 High Explosive 105mm shell, which is designed for use with the BAE Systems 105mm Light Gun L118. This shell has a 25% greater lethal area. It is combat proven and in service with the British Army and many other armies worldwide.
BAESY boasts a long-term earnings growth rate of 14%. The Zacks Consensus Estimate for BAESY’s 2023 sales indicates an improvement of 15.7% from the 2022 reported figure.
General Dynamics (GD - Free Report) : It designs and manufactures a wide range of armaments and ammunition such as the towed 155mm caliber 52-howitzer system SIAC, in artillery. SIAC’s advanced design meets the most demanding requirements of modern field artillery and coastal defense missions.
GD boasts a long-term earnings growth rate of 8.9%. The consensus estimate for GD’s 2023 sales indicates an improvement of 7.3% from the 2022 reported figure.
Lockheed Martin (LMT - Free Report) : Its HIMARS is the most technically advanced, affordable and sustainable artillery solution. HIMARS carries a six-pack of GMLRS rockets or one TACMS missile, and is designed to launch the entire MLRS family of munitions.
LMT boasts a long-term earnings growth rate of 6.5%. The consensus mark for LMT’s 2023 sales indicates an improvement of 0.9% from the 2022 reported figure.
Price Movement
In the past year, shares of RTX have lost 1.8% compared with the industry’s decline of 2.8%.
Image Source: Zacks Investment Research
Zacks Rank
RTX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.