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RTX Secures a $345M Deal to Build StormBreaker Munitions
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RTX Corp. (RTX - Free Report) recently secured a modification contract involving the StormBreaker munition. The award has been provided by the Air Force Life Cycle Management Center, Eglin Air Force Base, FL.
Details of the Deal
Valued at $344.6 million, the contract is expected to be completed by Aug 30, 2028. Per the terms of the deal, RTX will manufacture the 10th lot of StormBreaker munitions and also supply additional all up rounds, containers and trainers associated with it.
Work related to this deal will be carried out in Tucson, AZ. This contract involves foreign military sales to Norway, Germany, Italy and Finland.
What’s Favoring RTX?
The 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.
To this end, it is imperative to mention that RTX’s StormBreaker is a precision-guided winged munition. It is a smart weapon that can autonomously detect and classify moving targets in poor visibility situations caused by darkness, bad weather, smoke, or dust kicked up by helicopters. StormBreaker's small size enables the use of fewer aircraft to take out the same number of targets as larger weapons that require multiple jets.
These features must have been bolstering the demand for RTX’s StormBreaker. The latest contract win is a strong testament to that.
Looking ahead, the U.S. Air Force and U.S. Navy have begun StormBreaker smart weapon integration activities on the F-35 Joint Strike Fighter and the F/A-18E/F Super Hornet aircraft. StormBreaker is also officially approved for operational use on the F-15E. Such developments should usher in more contract wins for RTX in the near future, thereby bolstering its revenue generation prospects.
Growth Opportunities
The turbulence between Russia and Ukraine in the recent past, along with the ongoing hostility prevalent in the Middle East, has led nations to strengthen their warfare capabilities to deter any warfare-like situation or sudden assault. In this context, the demand for missiles may increase manifold as these have immense destructive power to support military operations efficiently.
Looking ahead, per a report from the Morder Intelligence firm, the missiles and missile defense market is anticipated to witness a CAGR of 4.8% during the 2024-2029 period. This should benefit RTX, which enjoys an extensive missile portfolio containing AIM-9X Sidewinder, SM-6, SM-3 interceptor, TOW missiles along with a few more, thereby boasting strong demand in the missile market.
Peer Prospects
Considering the solid growth opportunities offered by the global missile and missile defense market, other major defense primes like Northrop Grumman (NOC - Free Report) , Lockheed Martin (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 2.3%. The Zacks Consensus Estimate for its 2023 sales implies an improvement of 6.6% from the 2022 reported figure.
Lockheed Martin’s missile defense program includes the Patriot Advanced Capability-3 (PAC-3) and the 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.
The stock has a long-term earnings growth rate of 8.6%. Shares of LMT have risen 12.9% in the past three months.
For almost 25 years, Boeing-built and supported air and missile defense systems have protected 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 15.4% from the 2022 reported figure. The stock has a long-term earnings growth rate of 4%.
Price Performance
In the past three months, RTX’s shares have risen 20.5% compared with the industry’s 22.3% growth.
Image: Bigstock
RTX Secures a $345M Deal to Build StormBreaker Munitions
RTX Corp. (RTX - Free Report) recently secured a modification contract involving the StormBreaker munition. The award has been provided by the Air Force Life Cycle Management Center, Eglin Air Force Base, FL.
Details of the Deal
Valued at $344.6 million, the contract is expected to be completed by Aug 30, 2028. Per the terms of the deal, RTX will manufacture the 10th lot of StormBreaker munitions and also supply additional all up rounds, containers and trainers associated with it.
Work related to this deal will be carried out in Tucson, AZ. This contract involves foreign military sales to Norway, Germany, Italy and Finland.
What’s Favoring RTX?
The 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.
To this end, it is imperative to mention that RTX’s StormBreaker is a precision-guided winged munition. It is a smart weapon that can autonomously detect and classify moving targets in poor visibility situations caused by darkness, bad weather, smoke, or dust kicked up by helicopters. StormBreaker's small size enables the use of fewer aircraft to take out the same number of targets as larger weapons that require multiple jets.
These features must have been bolstering the demand for RTX’s StormBreaker. The latest contract win is a strong testament to that.
Looking ahead, the U.S. Air Force and U.S. Navy have begun StormBreaker smart weapon integration activities on the F-35 Joint Strike Fighter and the F/A-18E/F Super Hornet aircraft. StormBreaker is also officially approved for operational use on the F-15E. Such developments should usher in more contract wins for RTX in the near future, thereby bolstering its revenue generation prospects.
Growth Opportunities
The turbulence between Russia and Ukraine in the recent past, along with the ongoing hostility prevalent in the Middle East, has led nations to strengthen their warfare capabilities to deter any warfare-like situation or sudden assault. In this context, the demand for missiles may increase manifold as these have immense destructive power to support military operations efficiently.
Looking ahead, per a report from the Morder Intelligence firm, the missiles and missile defense market is anticipated to witness a CAGR of 4.8% during the 2024-2029 period. This should benefit RTX, which enjoys an extensive missile portfolio containing AIM-9X Sidewinder, SM-6, SM-3 interceptor, TOW missiles along with a few more, thereby boasting strong demand in the missile market.
Peer Prospects
Considering the solid growth opportunities offered by the global missile and missile defense market, other major defense primes like Northrop Grumman (NOC - Free Report) , Lockheed Martin (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 2.3%. The Zacks Consensus Estimate for its 2023 sales implies an improvement of 6.6% from the 2022 reported figure.
Lockheed Martin’s missile defense program includes the Patriot Advanced Capability-3 (PAC-3) and the 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.
The stock has a long-term earnings growth rate of 8.6%. Shares of LMT have risen 12.9% in the past three months.
For almost 25 years, Boeing-built and supported air and missile defense systems have protected 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 15.4% from the 2022 reported figure. The stock has a long-term earnings growth rate of 4%.
Price Performance
In the past three months, RTX’s shares have risen 20.5% compared with the industry’s 22.3% growth.
Image Source: Zacks Investment Research
Zacks Rank
RTX carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.