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RTX Secures Navy Contract to Support V-22 Osprey Aircraft

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RTX Corporation (RTX - Free Report) recently secured a contract to procure one auxiliary power unit (APU) for supporting the V-22 Osprey aircraft. The Naval Supply Systems Command Weapon Systems Support, Philadelphia, PA, has offered the award.

Valued at $19.7 million, the contract is scheduled to be completed by December 2024. The work related to the deal will be executed in East Hartford, CT.

What’s Favoring RTX?

The need to modernize military equipment and their capabilities has necessitated increased spending on defense and national security. This has contributed to the increased demand for military aircraft as well since they play a critical role in military missions.

Such strong demand tends to benefit RTX Corp. as its Pratt & Whitney business unit is an industry leader in the design, manufacture and maintenance of APUs and compact engines for powering military aircraft. The company also serves as a major supplier of gas turbine engines for a host of turboprops like the V-22 Osprey aircraft, as well as turbofan and turboshaft aircraft.

RTX’s combat-proven product portfolio of APUs includes PW980, APS5000, APS3200 and a few more, which serve a wide range of military aircraft and thus enjoy strong demand. This results in several contract wins for the company for supplying APUs, like the latest one. Such a steady order inflow should bolster its revenue growth.

Growth Prospects

Per the reports from the Coherent Market Insights firm, the military aircraft market is expected to witness a CAGR of 5.4% over the 2022-2030 period. This stands to benefit RTX Corp. as its APU contributes to the reliability and efficiency of various military aircraft and thus enjoys solid demand.

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

Lockheed Martin (LMT - Free Report) : It designs and integrates systems and manufactures the most agile and effective aircraft. Its product portfolio includes the Black Hawk, C-130J Super Hercules, F-16 Fighting Falcon, F-35 Lightning II fighter aircraft, etc.

Lockheed boasts a long-term earnings growth rate of 6.5%. Its shares have returned 1.5% to its investors in the past year.

Airbus (EADSY - Free Report) : Its military aircraft consist of the A400M, the C295 tactical transporter, the new-generation A330 Multi-Role Tanker Transport and the Eurofighter, the most advanced swing-role fighter ever conceived.

Airbus’ long-term earnings growth rate is pegged at 12.4%. Shares of EADSY have returned 50.1% value to its investors in the past year.

Textron (TXT - Free Report) : Its military aircraft include the Beechcraft T-6 training aircraft and the Beechcraft AT-6 light-attack aircraft. The company also manufactures the Beechcraft Model 18 light bomber, the T-44 and T-34 training aircraft and the T-1A jet trainer.

Textron boasts a long-term earnings growth rate of 11.7%. TXT stock has appreciated 33.3% in the past year.

Price Movement

In the past year, shares of RTX Corp. have decreased 11% compared with the industry’s decline of 5%.

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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