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RTX Secures a Contract to Support Standard Missile Program
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RTX Corp. (RTX - Free Report) recently clinched a modification contract involving its Standard Missile program. The award has been offered by the Naval Sea Systems Command, Washington, D.C.
Details of the Deal
Valued at $27 million, the contract is expected to be completed by September 2025. The latest modification enables RTX to exercise options to provide depot as well as intermediate-level repair and maintenance support for Standard Missile (“SM”).
A major portion of the work associated with this contract will be carried out in Tucson, AZ.
What’s Favoring RTX?
Nations are reinforcing their military capabilities to strengthen their defense structure in the growing threat environment. In this context, increased spending has been witnessed on missile capabilities, resulting in a significant order inflow for companies like RTX, which is a prominent missile maker in the United States with a strong international presence.
To this end, it is imperative to mention that RTX’s SM comes in two variants — SM-2 and SM-6. While the SM-2 missile is the world’s premier surface-to-air defense weapon that defends the U.S. Navy against anti-ship missiles and aircraft, SM-6 can perform anti-air warfare, anti-surface warfare and ballistic missile defense.
Notably, so far, more than 12,000 SM-2 missiles have been delivered to the U.S. and allied customers, and over 500 SM-6 missiles to the U.S. Navy. This statistic surely reflects the solid demand that these two missiles enjoy in the missile market. The latest contract win is a further testament to that. Such contract wins are expected to boost RTX’s top line in the coming quarters.
RTX’s Growth Prospects
The global peace index reflects an unstable environment worldwide, with the Russia-Ukraine war continuing for more than two years now, in addition to the ongoing hostility in different parts of the Middle East. This has set the stage for the defense sector to witness rising demand for military products, particularly missiles, as nations worldwide strive to protect their borders from unprecedented attacks.
Therefore, the growth prospect for the missile and missile defense systems market remains solid. To this end, the Mordor Intelligence firm projects the market to witness a CAGR of 5% over the 2024-2029 period.
Such a solid market growth projection stands to benefit RTX, which enjoys an extensive missile portfolio, including AIM-9X Sidewinder missile, TOW missiles and many more such weapons, apart from the Standard Missile.
Opportunities for Peers
Other defense contractors that are likely to benefit from the growth opportunities offered by the missile and missile defense market are as follows:
Northrop Grumman (NOC - Free Report) : Northrop is a prominent developer of missile systems and counter systems, including strategic deterrents, as well as subsystems and components. Its product portfolio includes the Integrated Air and Missile Defense Battle Command System, the Guided Multiple Launch Rocket System propulsion and warhead subsystems, the Hypersonic Attack Cruise Missile, the Advanced Anti-Radiation Guided Missile and a few other combat-proven products that support missile defense systems.
NOC boasts a long-term earnings growth rate of 8.7%. The Zacks Consensus Estimate for Northrop’s 2024 sales indicates an improvement of 4.6% from the 2023 reported figure.
Lockheed Martin (LMT - Free Report) : Lockheed’s Missiles and Fire Control business unit develops, manufactures and supports advanced combat missiles and rockets for military customers, including the U.S. Army, Navy, Air Force, Marine Corps, NASA and dozens of foreign allies. Some of its prominent products are the PAC-3 missile and the Terminal High Altitude Area Defense missile.
LMT boasts a long-term earnings growth rate of 4.1%. The Zacks Consensus Estimate for Lockheed’s 2024 sales indicates an improvement of 3.2% from the 2023 reported figure.
General Dynamics (GD - Free Report) : General Dynamics’ Ordnance and Tactical Systems unit is the system integrator of the 2.75-inch Hydra-70 family of rockets. It also produces composite rocket motor cases and launch tubes for tactical and strategic missiles.
GD boasts a long-term earnings growth rate of 12%. The Zacks Consensus Estimate for General Dynamics’ 2024 sales indicates growth of 10.5% from the 2023 reported figure.
Price Movement
In the past year, shares of RTX have risen 12.1% against the industry’s decline of 9.2%.
Image: Bigstock
RTX Secures a Contract to Support Standard Missile Program
RTX Corp. (RTX - Free Report) recently clinched a modification contract involving its Standard Missile program. The award has been offered by the Naval Sea Systems Command, Washington, D.C.
Details of the Deal
Valued at $27 million, the contract is expected to be completed by September 2025. The latest modification enables RTX to exercise options to provide depot as well as intermediate-level repair and maintenance support for Standard Missile (“SM”).
A major portion of the work associated with this contract will be carried out in Tucson, AZ.
What’s Favoring RTX?
Nations are reinforcing their military capabilities to strengthen their defense structure in the growing threat environment. In this context, increased spending has been witnessed on missile capabilities, resulting in a significant order inflow for companies like RTX, which is a prominent missile maker in the United States with a strong international presence.
To this end, it is imperative to mention that RTX’s SM comes in two variants — SM-2 and SM-6. While the SM-2 missile is the world’s premier surface-to-air defense weapon that defends the U.S. Navy against anti-ship missiles and aircraft, SM-6 can perform anti-air warfare, anti-surface warfare and ballistic missile defense.
Notably, so far, more than 12,000 SM-2 missiles have been delivered to the U.S. and allied customers, and over 500 SM-6 missiles to the U.S. Navy. This statistic surely reflects the solid demand that these two missiles enjoy in the missile market. The latest contract win is a further testament to that. Such contract wins are expected to boost RTX’s top line in the coming quarters.
RTX’s Growth Prospects
The global peace index reflects an unstable environment worldwide, with the Russia-Ukraine war continuing for more than two years now, in addition to the ongoing hostility in different parts of the Middle East. This has set the stage for the defense sector to witness rising demand for military products, particularly missiles, as nations worldwide strive to protect their borders from unprecedented attacks.
Therefore, the growth prospect for the missile and missile defense systems market remains solid. To this end, the Mordor Intelligence firm projects the market to witness a CAGR of 5% over the 2024-2029 period.
Such a solid market growth projection stands to benefit RTX, which enjoys an extensive missile portfolio, including AIM-9X Sidewinder missile, TOW missiles and many more such weapons, apart from the Standard Missile.
Opportunities for Peers
Other defense contractors that are likely to benefit from the growth opportunities offered by the missile and missile defense market are as follows:
Northrop Grumman (NOC - Free Report) : Northrop is a prominent developer of missile systems and counter systems, including strategic deterrents, as well as subsystems and components. Its product portfolio includes the Integrated Air and Missile Defense Battle Command System, the Guided Multiple Launch Rocket System propulsion and warhead subsystems, the Hypersonic Attack Cruise Missile, the Advanced Anti-Radiation Guided Missile and a few other combat-proven products that support missile defense systems.
NOC boasts a long-term earnings growth rate of 8.7%. The Zacks Consensus Estimate for Northrop’s 2024 sales indicates an improvement of 4.6% from the 2023 reported figure.
Lockheed Martin (LMT - Free Report) : Lockheed’s Missiles and Fire Control business unit develops, manufactures and supports advanced combat missiles and rockets for military customers, including the U.S. Army, Navy, Air Force, Marine Corps, NASA and dozens of foreign allies. Some of its prominent products are the PAC-3 missile and the Terminal High Altitude Area Defense missile.
LMT boasts a long-term earnings growth rate of 4.1%. The Zacks Consensus Estimate for Lockheed’s 2024 sales indicates an improvement of 3.2% from the 2023 reported figure.
General Dynamics (GD - Free Report) : General Dynamics’ Ordnance and Tactical Systems unit is the system integrator of the 2.75-inch Hydra-70 family of rockets. It also produces composite rocket motor cases and launch tubes for tactical and strategic missiles.
GD boasts a long-term earnings growth rate of 12%. The Zacks Consensus Estimate for General Dynamics’ 2024 sales indicates growth of 10.5% from the 2023 reported figure.
Price Movement
In the past year, shares of RTX have risen 12.1% against the industry’s decline of 9.2%.
Image Source: Zacks Investment Research
Zacks Rank
RTX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.