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RTX Corporation’s RTX unit, Raytheon, recently secured a modification contract to procure production spares for Standard Missile-2 (SM-2). The award has been provided by the Naval Sea Systems Command, Washington, D.C.
Details of RTX’s Deal
Valued at $141.1 million, the contract is expected to be completed by June 2030. The work related to this contract will be performed in East Camden, AR, and Tucson, AZ.
This contract includes foreign military sales to Japan, Australia, Netherlands, Spain and Germany.
What’s Favoring RTX Stock?
With countries worldwide enhancing their defense capabilities amid growing geopolitical threats and cross-border hostilities, spending on advanced military arms and ammunition, including missiles and missile systems, has been rapidly increasing. RTX, as a prominent manufacturer of missile systems, has thus been benefiting from this trend in the form of a steady flow of orders for its combat-proven missiles. The recent contract is an example of that.
Notably, RTX's SM-2 missile is a surface-to-air defense weapon for the U.S. Navy, countering threats up to 90 nautical miles. The solid demand for this program can be gauged from the fact that more than 12,000 SM-2 missiles have been delivered to the United States and its allied customers till today.
RTX’s Growth Prospects
Rising military conflicts, terrorism and border disputes have led nations to increase their focus on national security, particularly on missile defense systems in recent times, backed by the rapid development of advanced missile technologies over the last decade.
This is likely to have prompted Mordor Intelligence to forecast a compound annual growth rate of 5% for the global missiles and missile defense system market during the 2025-2030 period.
Such massive growth projections offer a strategic advantage to RTX, which has a handful of combat-proven missiles in its product portfolio, like the TOW missile, Guidance Enhanced Missile, Advanced Medium Range Air-to-Air Missile, Tomahawk and a few more, in addition to the SM-2.
Prospects for RTX’s Peers
Other defense companies that are likely to enjoy the perks of the expanding missiles and missile system market have been discussed below:
Northrop Grumman NOC: Northrop Grumman provides high-speed, long-range strike weapons like the AARGM-ER, which is 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%.
The Boeing Company BA: It manufactures various missile defense systems, including the Ground-based Midcourse Defense, Aegis Ballistic Missile Defense and Avenger. Boeing-built and supported air and missile defense systems have been protecting its customers for nearly 25 years against threats ranging from intercontinental ballistic missiles to hostile aircraft.
The company has a long-term earnings growth rate of 17.4%. The Zacks Consensus Estimate for BA’s 2025 sales indicates year-over-year growth of 25.6%.
Lockheed Martin LMT: Lockheed Martin’s missile defense program includes the Patriot Advanced Capability-3 and 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 company has a long-term earnings growth rate of 7.8%. The Zacks Consensus Estimate for LMT’s 2025 sales indicates year-over-year growth of 4.6%.