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RTX Secures $1.2B Contract for Patriot Missile Defense Systems
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RTX Corporation’s (RTX - Free Report) business segment, Raytheon, recently won a $1.2 billion contract for delivering its Patriot air and missile defense systems to Germany. The successful delivery of the aforementioned missile system should improve revenue growth for RTX in the future years.
Per the terms of the agreement, RTX will offer the most current Patriot Configuration 3+ radars, launchers, command and control stations, associated spares and support to the German government.
Significance of the Patriot System
Patriot is a long-range, high-altitude, all-weather missile defense system intended to counter tactical ballistic missiles, cruise missiles and sophisticated fighter aircraft. The Patriot system is made up of radars, command-and-control technologies and a variety of interceptors.
The robust demand for Patriots in the missile defense sector is demonstrated by the fact that 240 Patriot fire units have been delivered to date and that 19 nations are currently using PATRIOT for their integrated air and missile defense.
What’s Favoring RTX?
In the wake of the global upsurge in geopolitical tensions, countries have been bolstering their military capabilities on several fronts in recent years. Rapid technical advancements have made missile defense an increasingly important component of a country's military policy. RTX, being a well-known missile manufacturer, has been witnessing a solid flow of orders for its combat-proven missiles, backed by the growing use of missile defense by countries worldwide. The aforementioned contract award is a prime illustration of that.
Of late, hostile activities like the Russian invasion of Ukraine and the ongoing unrest in the Middle East have been bolstering the demand scenario in the missile market even more. To this end, the Mordor Intelligence firm predicts the global market for missiles and missile defense systems to witness a CAGR of 5% between 2024 and 2029. This should benefit RTX, which has a handful of combat-proven missiles in its product portfolio, like the TOW missile, Guidance Enhanced Missile, the National Advanced Surface-to-Air Missile System, Tomahawk, Standard Missile 2 and a few more, in addition to the Patriot missile.
Peer Prospects
As global threats rise, apart from RTX, military contractors that are projected to gain from the growth prospects presented by the missiles and missile defense system industry are as follows:
Northrop Grumman (NOC - Free Report) : It creates and manufactures warheads, fuses, sophisticated high-speed propulsion systems and other missile components. The company is one of the top suppliers of solid rocket propulsion for air-launched missiles, interceptors, submarine-launched weapons and hypersonic missile systems.
Northrop has a long-term (three to five years) earnings growth rate of 8.7%. The Zacks Consensus Estimate for NOC’s 2024 sales suggests growth of 4.6% from the prior-year reported figure.
Lockheed Martin (LMT - Free Report) : Its Missiles and Fire Control business unit develops, manufactures and supports advanced combat, missile, rocket, manned and unmanned systems for military customers. Some of its renowned products are the PAC-3 family of missiles, M270, RRPR, THHAD and a few more.
Lockheed has a long-term earnings growth rate of 4.1%. The Zacks Consensus Estimate for LMT’s 2024 sales implies growth of 3.2% from the prior-year reported figure.
General Dynamics (GD - Free Report) : Its Mission Systems unit has designed, produced, installed and sustained every version of the Weapon Control System (Fire Control) for Polaris, Poseidon, Trident I and Trident II Submarine Launched Ballistic Missiles. The company has been recently selected to perform the intercontinental ballistic missile Concept Design and Architecture-Guidance study.
General Dynamics’ long-term earnings growth rate is pegged at 12%. The Zacks Consensus Estimate for GD’s 2024 sales calls for growth of 10.5% from the prior-year reported figure.
Price Movement
In the past six months, shares of RTX Corp. have risen 17.8% against the industry’s decline of 6.8%.
Image: Bigstock
RTX Secures $1.2B Contract for Patriot Missile Defense Systems
RTX Corporation’s (RTX - Free Report) business segment, Raytheon, recently won a $1.2 billion contract for delivering its Patriot air and missile defense systems to Germany. The successful delivery of the aforementioned missile system should improve revenue growth for RTX in the future years.
Per the terms of the agreement, RTX will offer the most current Patriot Configuration 3+ radars, launchers, command and control stations, associated spares and support to the German government.
Significance of the Patriot System
Patriot is a long-range, high-altitude, all-weather missile defense system intended to counter tactical ballistic missiles, cruise missiles and sophisticated fighter aircraft. The Patriot system is made up of radars, command-and-control technologies and a variety of interceptors.
The robust demand for Patriots in the missile defense sector is demonstrated by the fact that 240 Patriot fire units have been delivered to date and that 19 nations are currently using PATRIOT for their integrated air and missile defense.
What’s Favoring RTX?
In the wake of the global upsurge in geopolitical tensions, countries have been bolstering their military capabilities on several fronts in recent years. Rapid technical advancements have made missile defense an increasingly important component of a country's military policy. RTX, being a well-known missile manufacturer, has been witnessing a solid flow of orders for its combat-proven missiles, backed by the growing use of missile defense by countries worldwide. The aforementioned contract award is a prime illustration of that.
Of late, hostile activities like the Russian invasion of Ukraine and the ongoing unrest in the Middle East have been bolstering the demand scenario in the missile market even more. To this end, the Mordor Intelligence firm predicts the global market for missiles and missile defense systems to witness a CAGR of 5% between 2024 and 2029. This should benefit RTX, which has a handful of combat-proven missiles in its product portfolio, like the TOW missile, Guidance Enhanced Missile, the National Advanced Surface-to-Air Missile System, Tomahawk, Standard Missile 2 and a few more, in addition to the Patriot missile.
Peer Prospects
As global threats rise, apart from RTX, military contractors that are projected to gain from the growth prospects presented by the missiles and missile defense system industry are as follows:
Northrop Grumman (NOC - Free Report) : It creates and manufactures warheads, fuses, sophisticated high-speed propulsion systems and other missile components. The company is one of the top suppliers of solid rocket propulsion for air-launched missiles, interceptors, submarine-launched weapons and hypersonic missile systems.
Northrop has a long-term (three to five years) earnings growth rate of 8.7%. The Zacks Consensus Estimate for NOC’s 2024 sales suggests growth of 4.6% from the prior-year reported figure.
Lockheed Martin (LMT - Free Report) : Its Missiles and Fire Control business unit develops, manufactures and supports advanced combat, missile, rocket, manned and unmanned systems for military customers. Some of its renowned products are the PAC-3 family of missiles, M270, RRPR, THHAD and a few more.
Lockheed has a long-term earnings growth rate of 4.1%. The Zacks Consensus Estimate for LMT’s 2024 sales implies growth of 3.2% from the prior-year reported figure.
General Dynamics (GD - Free Report) : Its Mission Systems unit has designed, produced, installed and sustained every version of the Weapon Control System (Fire Control) for Polaris, Poseidon, Trident I and Trident II Submarine Launched Ballistic Missiles. The company has been recently selected to perform the intercontinental ballistic missile Concept Design and Architecture-Guidance study.
General Dynamics’ long-term earnings growth rate is pegged at 12%. The Zacks Consensus Estimate for GD’s 2024 sales calls for growth of 10.5% from the prior-year reported figure.
Price Movement
In the past six months, shares of RTX Corp. have risen 17.8% against the industry’s decline of 6.8%.
Image Source: Zacks Investment Research
Zacks Rank
RTX Corporation currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.