RTX Corp. recently secured a significant deal for the Aegis missile guidance weapon system through the Naval Supply Systems Command Weapon Systems Support, located in Philadelphia, PA.
Key Contract Details and Timeline
The contract is worth $185.8 million and is expected to be finalized by December 2026. Under this agreement, RTX will either repair, enhance, or replace 160 components of the MK99 fire control system and the SPY-1D(V) transmitter, both integral parts of the Aegis Weapon System.
Most of the work will take place in Chesapeake, VA.
RTX’s Position in the Global Missile Industry
Countries around the world are increasing defense spending in response to rising geopolitical tensions, leading to a notable rise in investments for advanced military technologies over the last ten years. This includes significant funding for missile systems, which have become essential in modern combat strategies.
As a leading American producer of advanced missile and defense technologies, RTX has seen a steady influx of orders, particularly from the Pentagon and its allies. The recent contract exemplifies this ongoing demand.
RTX designs key missiles, such as the Tomahawk and Evolved Seasparrow Missile (ESSM), and manufactures the critical components that enhance a nation’s defensive capabilities. Among these, the MK 99 Fire Control System is vital for communication between naval vessels and missile control, while the SPY-1D(V) serves essential functions in search, tracking, and missile guidance.
Furthermore, the SPY-6 radar series developed by RTX can simultaneously defend against a range of threats, including ballistic missiles, cruise missiles, and hostile aircraft.
As the drive for military modernization continues, RTX stands strong with its advanced missile and defense weaponry, positioning itself favourably in the global market.
Future Prospects for RTX Stock
The increasing need for missile defense systems stems from various factors, including heightened military conflicts, terrorism, and intense border disputes, compounded by significant advancements in missile technology. According to Mordor Intelligence, a compound annual growth rate (CAGR) of 5% is projected for the global missile market from 2024 to 2029.
This potential for market growth looks promising for RTX, which continues to secure substantial defense contracts for its missile systems. Notably, in the third quarter of 2024, the company won several key missile contracts valued at $1.9 billion for the Lower Tier Air and Missile Defense System, $1.3 billion for the Standard Missile III (SM-3), and $1.2 billion for the Patriot Air Defense systems, among others.
These additions have contributed to RTX’s defense backlog, which reached an impressive $60 billion in September 2024, suggesting strong revenue opportunities in the years to come.
Opportunities for RTX’s Competitors
Several defense firms stand to benefit from the growing missile market. Here are a few noteworthy companies:
Northrop Grumman Corporation (NOC): Northrop Grumman develops high-speed, long-range strike weapons like the AARGM-ER—a supersonic air-launched tactical missile. Their long-term earnings growth rate is projected at 19.1%, and the Zacks Consensus Estimate anticipates a 5.3% increase in 2024 sales.
The Boeing Company (BA): Boeing manufactures various missile defense systems, such as the Ground-based Midcourse Defense and Aegis Ballistic Missile Defense. With a long-term earnings growth rate of 19.3%, its sales are expected to grow 23.4% in 2025.
Lockheed Martin Corporation (LMT): Lockheed Martin’s inventory includes the Patriot Advanced Capability-3 and other tactical missile programs, with long-term earnings growth at 4.5% and projected sales growth of 5.5% for 2024.
RTX Stock Performance
Over the past year, RTX shares have risen by 46.6%, outperforming the industry, which saw a 3.9% decline.
Image Source: Zacks Investment Research
RTX’s Current Zacks Rank
RTX holds a Zacks Rank of #3 (Hold). You can view the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.
On the Horizon: Promising Solar Investments
The solar sector is poised for growth as technology and the economy shift from fossil fuels to support renewable energy initiatives.
Analysts predict that solar will dominate renewable energy expansion, highlighting a substantial opportunity for investors in the coming years. Selecting the right stocks will be critical for capitalizing on this trend.
Discover Zacks’ hottest solar stock recommendation FREE.
The Boeing Company (BA) : Free Stock Analysis Report
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
RTX Corporation (RTX) : Free Stock Analysis Report
To read this article on Zacks.com, click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
