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RTX Corp. RTX recently secured a modification contract to provide hardware, software and services for the production of the Patriot missile program. The award has been offered by the U.S. Army Contracting Command, Redstone Arsenal, AL.
Valued at $946.4 million, the contract is projected to be completed by Dec. 31, 2029.
What’s Favoring RTX Stock?
Global defense spending has surged rapidly over the past decade as nations are significantly enhancing their military capabilities amid rising geopolitical tensions worldwide. This has been driving investments in advanced arms, including missile systems critical for modern warfare. RTX, being a leading missile manufacturer, thus benefits from steady orders from the Pentagon and U.S. allies involving its combat-proven missiles and associated parts as well as services. The recent contract award exemplifies RTX's pivotal role in meeting this growing global requirement for missiles and missile defense capabilities.
Notably, Patriot is a long-range, high-altitude, all-weather missile defense system intended to counter tactical ballistic missiles, cruise missiles and sophisticated fighter aircraft. The robust demand for Patriots in the missile defense sector can be demonstrated by the fact that since January 2015, the Patriot missile defense system has intercepted more than 150 ballistic missiles in combat operations around the world. Impressively, more than 90 of those intercepts involved the low-cost RTX-made Guidance Enhanced Missile family of surface-to-air missiles. The latest contract win bears yet another example of the solid demand that this missile program enjoys in the global missile space, which, in turn, should boost RTX’s backlog and revenue growth.
RTX Stock’s Prospects
Of late, hostile activities like the Russian invasion of Ukraine and the ongoing unrest in different parts of the Middle East have been further bolstering the demand scenario in the missile market.
This might have prompted the Mordor Intelligence firm to predict that the global market for missiles and missile defense systems will witness a CAGR of 5% between 2024 and 2029. This should benefit RTX, which has a handful of combat-proven missiles in its product portfolio, like the TOW missile, Guidance Enhanced Missile, the National Advanced Surface-to-Air Missile System, Tomahawk, Standard Missile 2 and a few more, in addition to the Patriot missile.
Growth Opportunities for RTX’s Peers
As global threats rise, apart from RTX, other military contractors projected to gain from the growth prospects presented by the missiles and missile defense system industry have been discussed below.