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Raytheon Wins $76M Air Force Deal for Anti-Radar System

SPR BEAV CAE RTN

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Defense prime Raytheon Company’s (RTN - Free Report) Missile Systems business segment recently secured a contract from the U.S. Air Force for providing vehicles and support equipment for Lot 10 Miniature Air Launched Decoy Jammer (MALD-J).  Work related to this deal is expected to be over by Jun 30, 2020.

Valued at $76.1 million, this contract will utilize fiscal 2016 and 2017 procurement and operations as well as maintenance funds. Work will be carried out at Tucson, AZ.  Notably, the contract was awarded by the Air Force Life Cycle Management Center, Eglin Air Force Base, FL.

A Brief Note on MALD-J

Raytheon’s Miniature Air Launched Decoy (MALD) is a low-cost, air-launched programmable craft. With MALD’s help, the U.S. and its allies can deceive enemy radars and integrated air defence systems by duplicating all combat flight profiles and radar signatures of their aircraft.

MALD-J is the jammer variant of the basic decoy system. The unmanned MALD-J navigates and operates much closer than conventional electronic warfares to the victim radar when jamming the electronics, allowing aviators and aircraft to stay out of harm’s way.

Our View

Given the rise in terrorist activities across the globe and the fact that MALD-J is the only stand-in jammer to enter production, Raytheon is poised to gain traction in the aerospace and defense sector.

With the U.S. fiscal 2016 bill emphasizing on cyber programs, cyber-oriented work is expected to yield solid growth going forward. During the first nine months of 2016, Raytheon recorded high net sales on various cybersecurity and special mission programs. Accordingly we expect the aforementioned contract to substantially boost net sales in the days ahead.

Zacks Rank & Stocks to Consider

Raytheon currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the aerospace and defense sector include B/E Aerospace Inc. (BEAV - Free Report) , CAE Inc. (CAE - Free Report) and Spirit AeroSystems Holdings, Inc. (SPR - Free Report) , all of which carry a Zacks Rank #2 (Buy).

B/E Aerospace saw a 0.10% uptick in its stock price over the last five days. On an average, the company posted a positive earnings surprise of 2.49% for the trailing four quarters.

CAE Inc. witnessed a 4.28% rally in the last five days. The company has an average positive earnings surprise of 25.00% for the last four quarters. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Spirit AeroSystems saw a 1.17% rise in its stock price in the last five days. On an average, the company posted a positive earnings surprise of 11.60% for the trailing four quarters.

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