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The Zacks Analyst Blog Highlights Raytheon Technologies, Boeing and L3Harris Technologies

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For Immediate Release

Chicago, IL – August 30, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Raytheon Technologies (RTX - Free Report) , Boeing (BA - Free Report) and L3Harris Technologies (LHX - Free Report) .

Here are highlights from Monday’s Analyst Blog:

U.S. Increases Aid to Ukraine: Defense Stocks to Gain

In a recent press release, U.S. President Biden announced an aid package worth $3 billion to Ukraine in a bid to further strengthen America's long-term commitment of defending Ukrainian citizens against Russia's hostile aggression. This represents the largest single U.S. aid package to Ukraine since Russia invaded the nation six months ago and a total U.S. commitment of more than $13.5 billion in security assistance to Ukraine since January 2021. 

As stated by the President, this aid will enable Ukraine to acquire air defense systems, artillery systems and munitions, counter-unmanned aerial systems, and radars over the long term. This once again puts the spotlight on U.S. defense primes like Raytheon Technologies, Boeing and L3Harris Technologies, which are expected to gain significantly, with this aid package playing the role of the primary catalyst.

Details of the Aid

The latest aid package promised by the United States underscores multi-year investments in critical capabilities to boost Ukraine's armed forces against Russia. Product wise, the United States has committed to provide six additional National Advanced Surface-to-Air Missile Systems and munitions, along with up to 245,000 rounds of 155 mm artillery ammunition and up to 65,000 rounds of 120 mm mortar ammunition to Ukraine.

The package pledges to supply up to 24 counter-artillery radars, Puma Unmanned Aerial Systems and support equipment for Scan Eagle unmanned aerial systems.

Further, Ukraine will assist Ukrainians by providing its VAMPIRE Counter-Unmanned Aerial Systems to combat Russia's unmanned aerial systems. The aid will also provide laser-guided rocket systems, apart from being used for training, maintenance and sustainment of the Ukrainian armed force. 

Defense Stocks to Gain

Considering the aforementioned discussion, it is quite obvious that U.S. defense contractors, particularly those manufacturing the defense products that are being pledged by America to Ukraine as part of the latest aid package, will gain substantially in the coming days. Also, their inherent growth prospects make them lucrative options for a prudent investor's watchlist. These stocks are:

Raytheon: It is a well-known radar and missile maker in the United States. Its National Advanced Surface-to-Air Missile System, best known as NASAMS, is a highly adaptable mid-range air defense solution, which is currently owned by 12 countries across the globe. Notably, Pentagon has signed a $182 million contract with Raytheon for the purchase of 3 NASAMS short-and medium-range anti-aircraft missile systems for Ukraine as part of this $3 billion aid package.

The stock boasts a long-term earnings growth rate of 10.4%. The Zacks Consensus Estimate for RTX's 2022 sales implies an improvement of 5% over the 2021 reported sales figure.

Boeing: It is the manufacturer of combat-proven aircraft as well as missile defense systems. With over 1.2 million flight hours, Boeing's ScanEagle offers a 99% mission readiness rate and best-in-class reliability. It provides persistent daytime and nighttime intelligence, surveillance and reconnaissance (ISR) in some of the most extreme environments in the world, while its air-to-ground systems deliver stable communications up to 55 nautical miles from a ground control station.

The stock boasts a long-term earnings growth rate of 4%. The Zacks Consensus Estimate for BA's 2022 sales implies an improvement of 14.8% from the 2021 reported sales figure.

L3Harris Technologies: It is a technology-oriented aerospace and defense player that delivers advanced defense and commercial technologies across air, land, sea, space and cyber domains. L3Harris' Vehicle-Agnostic Modular Palletized ISR Rocket Equipment (VAMPIRE) is a portable kit that can be installed on most vehicles with a cargo bed for launching the advanced precision kill weapons system or other laser-guided munitions. It provides a rapid solution for arming non-tactical vehicles and a variety of tactical vehicles while integrating components to customer-specific specifications.

In Ukraine, the company enjoys a competitive edge on the back of its work experience with the Ukraine Security Assistance Initiative. Consequently, L3Harris views a growth opportunity for its radios, night vision goggles and even some ISR capabilities in this nation. The stock boasts a long-term earnings growth rate of 3.3%.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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