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RTX Corporation’s RTX unit, Raytheon, recently secured a $333.3 million contract for facilitating the full-rate production of Standard Missile-6 (SM-6). RTX will also supply spares and a round design agent for SM-6 under this agreement.
Details of RTX’s Deal
The majority of the work related to this contract will be performed in Tucson, AZ, and Huntsville, AL. This contract is projected to be completed by October 2027.
The award has been provided by the Naval Sea Systems Command, Washington, D.C. This contract includes options that, if exercised, will bring the total value of the agreement to $908.1 million.
What’s Favoring RTX Stock?
With countries worldwide enhancing their defense capabilities, 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 been benefiting from a steady flow of orders from the Pentagon and other U.S. allies. The recent contract is an example of that.
RTX's SM-6 missile is an advanced and versatile defense system for naval ships. It can handle multiple missions, including defending against air attacks, surface threats and ballistic missiles, making it highly effective in protecting fleets. Its advanced design combines reliable technology to provide strong and cost-effective defense for the U.S. Navy and its allies.
Such impressive features of this missile must have enabled the company to deliver more than 500 of SM-6 missiles to the U.S. Navy, which reflects the solid demand it enjoys in the missile market.
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 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 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, Standard Missile 2 and a few more, in addition to the SM-6.
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 19%. The Zacks Consensus Estimate for NOC’s 2025 sales indicates year-over-year growth of 3.4%.
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 19.3%. The Zacks Consensus Estimate for BA’s 2025 sales indicates year-over-year growth of 22.1%.
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 4.4%. The Zacks Consensus Estimate for LMT’s 2025 sales indicates year-over-year growth of 4.1%.
