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RTX Secures $80.3M Contract to Boost AIM-9X Missile Production

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RTX Corporation (RTX - Free Report) recently secured a modification contract to boost capacity for the production of AIM-9X missiles. The Naval Air Systems Command, Patuxent River, MD, has awarded the deal.

Valued at $80.3 million, the contract is scheduled to be completed by June 2026. The work related to the deal will be carried out in Midland, Ontario, Canada; Heilbronn, Germany, as well as multiple locations across the United States.

What’s Favoring RTX?

To strengthen their defense capabilities, nations have been bolstering their defense spending considerably. Missiles, being a significant weaponry in military missions, have also witnessed demand. Going forward, this demand may increase manifold as missiles are a critical component of the national security strategy.

RTX’s AIM-9X Sidewinder is the most advanced infrared-tracking, short-range, air-to-air and surface-to-air missile in the world. It is configured for easy installation in a range of modern aircraft, including Boeing’s F-15, F/A-18 and E/A-18G and Lockheed’s F-22 and F-35 fighters.

The latest variant of AIM-9X Sidewinder, the AIM-9X Block II missile, features a redesigned fuse and a digital ignition safety device that enhances ground handling and in-flight safety. Backed by such advanced technology, RTX Corp. witnesses significant orders for the same, like the latest one. Such offerings in an increased demand scenario ensure a steady flow of missile orders for RTX Corp., which should bolster its overall revenues.

Growth Prospects

Per the reports from Mordor Intelligence, the missile and missile defense system market is expected to witness a CAGR of 4.8% from 2023 to 2028. This stands to benefit RTX, which enjoys an extensive missile portfolio of SM-6, SM-3 interceptor and TOW missiles and thereby boasts strong demand in the military market.

Other defense contractors that are likely to benefit from the growth opportunities offered by the aforementioned market are as follows:

Northrop Grumman (NOC - Free Report) : Northrop is a prominent developer of missile systems and counter systems, including strategic deterrents, as well as subsystems and components. To strengthen its position in the missile market, the company acquired Orbital ATK in 2018, which used to be one of the industry leaders in providing missile components across air, sea and land-based systems.

NOC boasts a long-term earnings growth rate of 4.1%. The Zacks Consensus Estimate for Northrop’s 2023 sales indicates an improvement of 5.6% from the 2022 reported figure.

Lockheed Martin (LMT - Free Report) : Lockheed’s Missiles and Fire Control business unit develops, manufactures and supports advanced combat missiles and rockets for military customers, including the U.S. Army, Navy, Air Force, Marine Corps, NASA and dozens of foreign allies. Some of its prominent products include the PAC-3 missile and the Terminal High Altitude Area Defense missile.

LMT boasts a long-term earnings growth rate of 6.5%. Shares of Lockheed have increased 2.7% in the past year.

General Dynamics (GD - Free Report) : General Dynamics’ Ordnance and Tactical Systems is the system integrator of the 2.75-inch Hydra-70 family of rockets. It also produces composite rocket motor cases and launch tubes for tactical and strategic missiles.

GD boasts a long-term earnings growth rate of 8.9%. The Zacks Consensus Estimate for General Dynamics’ 2023 sales indicates growth of 7.3% from the 2022 reported figure.

Price Movement

In the past year, shares of RTX Corp. have decreased 8.2% compared with the industry’s decline of 4.4%.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank

RTX Corp. currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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