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RTX Corp.’s RTX business unit, Raytheon, recently clinched a modification contract involving the Standard Missile-6 (SM-6). The award has been offered by the Naval Sea Systems Command, Washington, D.C.
Details of the Deal
Valued at $117.1 million, the contract is expected to be completed by April 2029. Per the terms of the deal, RTX will provide funding for manufacturing, assembly, testing and delivery of SM-6 Tactical All-Up Rounds to support full-rate production requirements.
The majority of work related to this deal will be executed in Tucson, AZ, and East Camden, AK.
What’s Favoring RTX Stock?
Escalating geopolitical tensions, ongoing military conflicts, rising instances of terrorism, and persistent border disputes have compelled nations worldwide to prioritize national defense strategies. Against this backdrop, a growing need to deter and respond to evolving threats has heightened the focus on missile defense systems.
The rapid advancement of missile technologies over the past decade has further strengthened this trend, enabling more sophisticated and effective defense capabilities. As a result, global demand for missiles—both offensive and defensive—is witnessing a sharp uptick, creating significant growth opportunities for missile manufacturers like RTX and positioning the missile market for robust long-term expansion.
This is likely to have prompted the Mordor Intelligence firm to forecast a compound annual growth rate of 5% for the global missiles and missile defense system market during the 2025-2030 period.
Such solid market growth projections offer a strategic advantage to RTX, which has a handful of combat-proven missiles in its product portfolio, including the TOW missile, Guidance Enhanced Missile, Advanced Medium-Range Air-to-Air Missile, Tomahawk, Standard Missile 2, and several others, in addition to the SM-6. Notably, its Raytheon unit also provides advanced sensors and interceptors to identify, track and defeat threats as part of a layered missile defense.
Prospects for RTX’s Peers
Other defense companies that are likely to enjoy the perks of the expanding global missiles and missile system market have been discussed below:
Northrop Grumman NOC: Northrop Grumman provides high-speed, long-range strike weapons, such as the AARGM-ER, a supersonic, air-launched tactical missile system. It also develops and builds advanced missile defense technology, ranging from command systems to directed energy weapons, advanced munitions and powerful sensors.
The company’s long-term (three to five years) earnings growth rate is 4.2%. The Zacks Consensus Estimate for NOC’s 2025 sales indicates year-over-year growth of 3%.