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RTX Secures a Contract for Next Generation Jammer Mid-Band System

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RTX Corp. (RTX - Free Report) recently clinched a contract involving its Next Generation Jammer Mid-Band (NGJ-MB) System. The award has been provided by the Naval Supply Systems Command Weapon Systems Support, Philadelphia, PA.

Details of the Deal Secured by RTX

Valued at $27.7 million, the contract is expected to be completed by August 2026. Per the terms of the deal, RTX will be involved in the repair of several components used in the NGJ-MB System used on the F/A-18 aircraft. 

A major portion of the work related to this contract will be executed in Forest, MS, and Fort Wayne, IN.

What’s the Purpose of NGJ-MB?

RTX’s NGJ-MB offers enhanced airborne electronic attack capabilities to fighter aircraft. It is the U.S. Navy’s advanced electronic attack system to disrupt enemy technology.

The NGJ-MB uses digital, software-based and Active Electronically Scanned Array technologies that allow operators to non-kinetically attack multiple targets at greater distances.

What’s Favoring the RTX Stock?

Escalating geopolitical tensions worldwide have led to increased defense budgets and modernization initiatives across nations as they strive to strengthen their defense capabilities, electronic warfare (EW) systems being one among them. Notably, EW systems constitute a critical element of a nation’s defense structure, with a rapid evolution in the use of advanced technologies over the last decade. 

In particular, electronic attack systems like RTX’s NGJ-MB help strengthen a nation’s ability to perform threat analysis and respond in a timely manner. They do so by offering countermeasures such as signal jamming, electromagnetic deception (spoofing), lasers and radio frequency (RF) weapons to achieve threat neutralization. 

RTX, well-known for its combat-proven missiles and radars, provides the United States and its international partners with the combat power and technology needed to complete any direct attack, standoff and strike missions during times of need. Its NGJ-MB is one such product that boasts the capability to disrupt enemy technology, including air defense systems and communications tools. 

Factors like increased integration of AI into EW systems, the advent of cognitive EW systems, and military forces of varied nations deploying more sophisticated electronic and cyber capabilities are boosting the demand for cutting-edge EW technologies lately. This demand is reflected in the projected growth of the EW market, which is projected to expand at a compound annual growth rate (CAGR) of 12.5% from 2023 to 2028, reaching $19.4 billion by 2028, as per a report by the Markets and Markets firm.

This should benefit EW system manufacturers like RTX, in the form of steady order flow from the Pentagon and other U.S. allies for advanced EW systems like NGJ-MB. The latest contract win is an example of that.

Opportunities for RTX Peers

Other defense contractors that are expected to reap the benefits of the expanding EW market are discussed below:

L3Harris Technologies (LHX - Free Report) : It manufactures a handful of electronic warfare (EW) systems like AN/ALQ-214 (IDECM) F/A-18 Countermeasure System, Viper Shield AN/ALQ-254(V)1 All-digital Electronic Warfare Suite, AN/ALQ-161A B1-B Countermeasure System, AN/ALQ-172 B-52 and C-130 Self Protection System and CREW Vehicle Receiver/Jammer (CVRJ).

The long-term growth rate of L3 Harris Technologies is pegged at 9.3%. The consensus estimate for LHX’s 2024 sales indicates a 10% improvement from the prior year's reported figure. 

Northrop Grumman (NOC - Free Report) : It has been providing Naval Airborne Electronic Warfare solutions for more than 55 years and is the Airborne Electronic Attack System Integrator for the U.S. Navy warfighter. Some of its EW systems are the ALQ-251 radio frequency countermeasures system and the AN/APR-39 Radar Warning Receiver/Electronic Warfare Management System.

Northrop boasts a solid long-term earnings growth rate of 8.7%. The consensus estimate for NOC’s 2024 sales indicates a 5.4% improvement from the prior year's reported figure.

Lockheed Martin (LMT - Free Report) : It provides global ground EW solutions to U.S. forces, as well as partner nations, through a unique next-generation open architecture product platform and open business model.  Its Advanced Off-Board Electronic Warfare (“AOEW”) program delivers persistent electronic surveillance and attack capability against naval threats like anti-ship missiles.

Lockheed boasts a solid long-term earnings growth rate of 4.7%. The consensus estimate for LMT’s 2024 sales indicates a 5.3% improvement from the prior year's reported figure.

Price Movement

Shares of RTX have risen 39.3% in the past year against the industry's decline of 1.4%.

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RTX's 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.

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