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Raytheon (RTX) Wins $353.9M Deal for LTAMDS Radar Prototypes
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Raytheon Technologies Corporation (RTX - Free Report) recently clinched a contract to provide additional lower-tier air and missile defense sensor (LTAMDS) radar prototypes. The deal has been awarded by the U.S. Army Contracting Command, Redstone Arsenal, AL.
Valued at $353.9 million, the contract is expected to be complete by May 1, 2025. The work involved in the deal will be carried out at multiple locations across the United States.
What’s Favoring Raytheon?
The recent tiff between Russia and Ukraine has resulted in nations reinforcing their defense structures to strengthen their warfare capabilities. The increased defense spending brings the spotlight on equipment that can ease military surveillance and reconnaissance tasks. To this end, radars play an integral role in military expeditions and boast capabilities that provide support against advanced threats in the warfare zone.
In this context, it is imperative to mention that Raytheon’s LTAMDS family of radars is developed for the U.S. Army’s LTAMDS program and has been designed to defeat advanced and next-generation threats, including hypersonic weapons.
Raytheon’s LTAMDS or GhostEye uses the active electronically scanned array, or AESA, and gallium nitride, or GaN, which strengthens the radar signal and enhances its sensitivity for a longer range, higher resolution and increased capacity.
Thus, the product, with such remarkable features, is likely to witness a surge in demand going forward amid rising conflicts, like the latest one. This, in turn, may bolster Raytheon’s revenue generation prospects from the radar arena.
Growth Prospects
The demand for military radars may fortify in the long haul as revealed in the projections of the Markets and Markets report, which anticipates a rise at a CAGR of 4.4% during the 2020-2025 period. This stands to benefit RTX as it enjoys an established position in the military radar market.
Also, the expanding military radar market bodes well for defense majors like Lockheed Martin (LMT - Free Report) , L3Harris Technologies (LHX - Free Report) and Northrop Grumman (NOC - Free Report) .
Lockheed's product portfolio includes various radar and electro-optical/infrared sensor systems like the AN/APY-9 radar, airborne ground surveillance radar systems, the IRST21 Sensos system, AN/TPQ-53 radar systems, SPY-7, the long-range discrimination radar and a few more.
Lockheed boasts a long-term earnings growth rate of 5.7%. LMT shares have returned 7.9% in the past year.
L3Harris manufactures combat-proven radars like SPS-48, land-based surveillance radars, the AN/APY-11 Multimode radar, the Tactical Air Surveillance radar, the AN/SPS-48G Long-range 3D surveillance radar and many more.
L3Harris boasts a long-term earnings growth rate of 4.4%. The shares of LHX have appreciated 1.4% in the past year.
Northrop's broad portfolio of products comprises radars like the AN/APG-83 scalable agile beam radar, the AN/ASQ-236 Dragon’s eye radar pod as well as AN/APG-81 and AN/APG-71 for the F-35 and F-22 jets, respectively.
Northrop boasts a long-term earnings growth rate of 6.1%. NOC shares have rallied 27.8% in the past year.
Price Movement
In the past year, Raytheon shares have rallied 7.9% against the industry’s decline of 1%.
Image: Bigstock
Raytheon (RTX) Wins $353.9M Deal for LTAMDS Radar Prototypes
Raytheon Technologies Corporation (RTX - Free Report) recently clinched a contract to provide additional lower-tier air and missile defense sensor (LTAMDS) radar prototypes. The deal has been awarded by the U.S. Army Contracting Command, Redstone Arsenal, AL.
Valued at $353.9 million, the contract is expected to be complete by May 1, 2025. The work involved in the deal will be carried out at multiple locations across the United States.
What’s Favoring Raytheon?
The recent tiff between Russia and Ukraine has resulted in nations reinforcing their defense structures to strengthen their warfare capabilities. The increased defense spending brings the spotlight on equipment that can ease military surveillance and reconnaissance tasks. To this end, radars play an integral role in military expeditions and boast capabilities that provide support against advanced threats in the warfare zone.
In this context, it is imperative to mention that Raytheon’s LTAMDS family of radars is developed for the U.S. Army’s LTAMDS program and has been designed to defeat advanced and next-generation threats, including hypersonic weapons.
Raytheon’s LTAMDS or GhostEye uses the active electronically scanned array, or AESA, and gallium nitride, or GaN, which strengthens the radar signal and enhances its sensitivity for a longer range, higher resolution and increased capacity.
Thus, the product, with such remarkable features, is likely to witness a surge in demand going forward amid rising conflicts, like the latest one. This, in turn, may bolster Raytheon’s revenue generation prospects from the radar arena.
Growth Prospects
The demand for military radars may fortify in the long haul as revealed in the projections of the Markets and Markets report, which anticipates a rise at a CAGR of 4.4% during the 2020-2025 period. This stands to benefit RTX as it enjoys an established position in the military radar market.
Also, the expanding military radar market bodes well for defense majors like Lockheed Martin (LMT - Free Report) , L3Harris Technologies (LHX - Free Report) and Northrop Grumman (NOC - Free Report) .
Lockheed's product portfolio includes various radar and electro-optical/infrared sensor systems like the AN/APY-9 radar, airborne ground surveillance radar systems, the IRST21 Sensos system, AN/TPQ-53 radar systems, SPY-7, the long-range discrimination radar and a few more.
Lockheed boasts a long-term earnings growth rate of 5.7%. LMT shares have returned 7.9% in the past year.
L3Harris manufactures combat-proven radars like SPS-48, land-based surveillance radars, the AN/APY-11 Multimode radar, the Tactical Air Surveillance radar, the AN/SPS-48G Long-range 3D surveillance radar and many more.
L3Harris boasts a long-term earnings growth rate of 4.4%. The shares of LHX have appreciated 1.4% in the past year.
Northrop's broad portfolio of products comprises radars like the AN/APG-83 scalable agile beam radar, the AN/ASQ-236 Dragon’s eye radar pod as well as AN/APG-81 and AN/APG-71 for the F-35 and F-22 jets, respectively.
Northrop boasts a long-term earnings growth rate of 6.1%. NOC shares have rallied 27.8% in the past year.
Price Movement
In the past year, Raytheon shares have rallied 7.9% against the industry’s decline of 1%.
Image Source: Zacks Investment Research
Zacks Rank
Raytheon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.