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RTX Corporation’s RTX business segment, Raytheon, recently won a $529 million contract for delivering its Patriot air and missile defense systems fire unit and related equipment to the Netherlands. Per the terms of the deal, RTX will deliver a single fire unit consisting of a radar, launchers, command and control stations, and other support equipment.
Work related to this deal will be primarily executed in Andover, MA and Huntsville, AL.
What is Favoring RTX Stock?
Rapidly rising geopolitical tensions and heightened regional conflicts in several parts of the world have driven countries to strengthen their defense capabilities. Since a significant portion of a country's defense arsenal consists of missiles, nations are heavily investing in sophisticated missile systems for defense and deterrence. This in turn has been benefitting RTX, a renowned missile maker. The latest contract win is a bright example of that.
In particular, RTX’s Patriot is a long-range, high-altitude and all-weather missile defense system, intended to counter tactical ballistic missiles, cruise missiles and sophisticated fighter aircraft. The robust demand for Patriot missiles in the defense sector is demonstrated by the fact that 240 Patriot fire units have been delivered to date and 19 nations are currently using PATRIOT for their integrated air and missile defense.
Looking ahead, the Mordor Intelligence firm predicts the global market for missiles and missile defense systems will witness a CAGR of 5% between 2025 and 2030. This should significantly benefit RTX, which has a handful of combat-proven missiles in its product portfolio, such as the SM-6 missile, Guidance Enhanced Missile, the National Advanced Surface-to-Air Missile System, Tomahawk, Standard Missile 2, AIM-9X Sidewinder missiles and a few more, in addition to Patriot.
Opportunities for Other Defense Stocks
As global threats rise, military contractors that are expected to gain from the growth prospects presented by the missiles and missile defense system market are as follows:
The Boeing Company BA: For almost 25 years, the company has been providing air and missile defense systems to the United States, its allies and international partners. The company’s offerings include the Avenger Air Defense System, Aegis Ballistic Missile Defense and Ground-Based Midcourse Defense.
Boeing boasts a long-term (three to five years) earnings growth rate of 19.3%. The Zacks Consensus Estimate for BA’s 2025 sales implies growth of 22.1% from the estimated figure of 2024.
Northrop Grumman NOC: The company provides high-speed, long-range strike weapons like the AARGM-ER, which is a supersonic, air-launched tactical missile system. It also develops and manufactures warheads, fuses, advanced high-speed propulsion systems and other missile components.
Northrop has a long-term earnings growth rate of 19%. The Zacks Consensus Estimate for NOC’s 2025 sales indicates growth of 3.4% from the estimated figure of 2024.
Lockheed Martin LMT: The company’s Missiles and Fire Control business unit develops, manufactures and supports advanced missiles and rockets. Some of its renowned products are the PAC-3 family of missiles, M270, Reduced-Range Practice Rocket and Terminal High Altitude Area Defense.
Lockheed has a long-term earnings growth rate of 4.4%. The Zacks Consensus Estimate for LMT’s 2025 sales indicates growth of 4.1% from the estimated figure of 2024.