RTX Secures a $186M Navy Contract to Support Aegis Weapon System

RTX Corp. RTX recently clinched a contract involving the Aegis missile guidance weapon system. The award has been offered by the Naval Supply Systems Command Weapon Systems Support, Philadelphia, PA. Details of the RTX DealValued at $185.8 million, the contract is projected to be completed by December 2026. Per the terms of the deal, RTX will repair, upgrade, or replace 160 parts of the MK99 fire control system and the SPY-1D(V) transmitter, two subsystems of the Aegis Weapon System.A major portion of the work related to this contract will be executed in Chesapeake, VA.RTX’s Place in Missile MarketAs nations globally strive to bolster their defense capabilities amid expanding geopolitical tensions, expenditures on advanced military weaponry have surged significantly over the past decade. This trend includes increased investments in sophisticated missile systems, which are now pivotal in modern warfare strategies. RTX, a prominent American manufacturer of such state-of-the-art missile and missile defense systems, enjoys a consistent stream of orders, particularly from the Pentagon and allied nations of the United States. The latest contract awarded to RTX serves as a prime example of that.Apart from being a designer of lethal missiles like Tomahawk and Evolved Seasparrow Missile (“ESSM”), RTX also excels in manufacturing associated components that play a crucial role in uplifting a nation’s missile defense capabilities. Such components include the MK 99 Fire Control System that communicates with navy ships’ missile control stations as well as the SPY-1D(V) high-powered transmitter that supports search, track and missile guidance functions.Moreover, the RTX-built SPY-6 family of radars is capable of defending against ballistic missiles, cruise missiles, hypersonic missiles, hostile aircraft and surface ships simultaneously. As military modernization accelerates, RTX, with cutting-edge missile and missile defense weapons in its portfolio, enjoys a dominant position in the global missile and missile defense market.What Lies Ahead for RTX Stock?The demand for missiles and missile defense systems is driven by multiple factors like rising military conflicts, terrorism, and escalating border disputes as well as significant advancements in missile technology over the past decade. This must have prompted the Mordor Intelligence firm to project a compound annual growth rate (CAGR) of 5% for the global missile and missile defense market between 2024 and 2029.Such market growth prospects should bode well for RTX, considering the solid defense contracts it continues to secure for its advanced missile systems. Evidently, during the third quarter of 2024, the company clinched a handful of valuable missile contracts. These include the $1.9-billion order for the production of Lower Tier Air and Missile Defense System, $1.3-billion contract to provide Standard Missile III (SM-3), $1.2 billion deal to provide Patriot Air Defense systems, $1.2 billion order to provide advanced medium-range air-to-air missile (AMRAAM) and many more. These contract wins brought RTX’s defense backlog to a solid $60 billion as of September 2024, which indicates strong revenue generation prospects for the company in the coming years.Opportunities for RTX’s PeersOther defense companies that are likely to enjoy the perks of the expanding missiles and missile system market have been discussed below.Northrop Grumman Corporation NOC: Northrop Grumman provides high-speed, long-range strike weapons like the AARGM-ER, which is a supersonic, air-launched tactical missile system. It also develops and builds advanced missile defense technology, ranging from command systems to directed energy weapons, advanced munitions and powerful sensors.The company’s long-term (three to five years) earnings growth rate is 19.1%. The Zacks Consensus Estimate for NOC’s 2024 sales indicates year-over-year growth of 5.3%.The Boeing Company BA: It manufactures various missile defense systems, including the Ground-based Midcourse Defense, Aegis Ballistic Missile Defense and Avenger. Boeing-built and supported air and missile defense systems have been protecting its customers against threats ranging from intercontinental ballistic missiles to hostile aircraft for nearly 25 years.The company has a long-term earnings growth rate of 19.3%. The Zacks Consensus Estimate for BA’s 2025 sales indicates year-over-year growth of 23.4%.Lockheed Martin Corporation LMT: Lockheed Martin’s missile defense program includes the Patriot Advanced Capability-3 and Terminal High-Altitude Area Defense air and missile defense programs. It also manufactures the Multiple Launch Rocket System, the Joint Air-to-Surface Standoff Missile and Javelin tactical missile programs alongside other tactical missiles.The company has a long-term earnings growth rate of 4.5%.  The Zacks Consensus Estimate for LMT’s 2024 sales indicates year-over-year growth of 5.5%.RTX Stock Price MovementShares of RTX have gained 46.6% in the past year against the industry’s 3.9% decline.Image Source: Zacks Investment ResearchRTX’s Zacks RankRTX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Must-See: Solar Stocks Poised to SkyrocketThe solar industry stands to bounce back as tech companies and the economy transition away from fossil fuels to power the AI boom.Trillions of dollars will be invested in clean energy over the coming years – and analysts predict solar will account for 80% of the renewable energy expansion. This creates an outsized opportunity to profit in the near-term and for years to come. But you have to pick the right stocks to get into.Discover Zacks’ hottest solar stock recommendation FREE.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Boeing Company (BA): Free Stock Analysis Report Lockheed Martin Corporation (LMT): Free Stock Analysis Report Northrop Grumman Corporation (NOC): Free Stock Analysis Report RTX Corporation (RTX): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks