Advertisement
UK markets closed
  • FTSE 100

    7,995.58
    +71.78 (+0.91%)
     
  • FTSE 250

    19,721.24
    -65.63 (-0.33%)
     
  • AIM

    755.91
    -2.92 (-0.38%)
     
  • GBP/EUR

    1.1694
    -0.0007 (-0.06%)
     
  • GBP/USD

    1.2451
    -0.0104 (-0.83%)
     
  • Bitcoin GBP

    51,935.03
    -2,284.45 (-4.21%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • S&P 500

    5,123.41
    -75.65 (-1.46%)
     
  • DOW

    37,983.24
    -475.84 (-1.24%)
     
  • CRUDE OIL

    85.45
    +0.43 (+0.51%)
     
  • GOLD FUTURES

    2,360.20
    -12.50 (-0.53%)
     
  • NIKKEI 225

    39,523.55
    +80.92 (+0.21%)
     
  • HANG SENG

    16,721.69
    -373.34 (-2.18%)
     
  • DAX

    17,930.32
    -24.16 (-0.13%)
     
  • CAC 40

    8,010.83
    -12.91 (-0.16%)
     

Raytheon (RTX) Wins $619M Deal for AN/SPY-6(V) Production

Raytheon Technologies Corp.’s RTX business unit, Missiles and Defense, recently clinched a contract to support the production of the AN/SPY-6(V) family of radars. The Naval Sea Systems Command, Washington, D.C., has awarded the deal.

Valued at $619.2 million, this contract involves hardware delivery related to the production of the AN/SPY-6(V) family of radars. The work related to this deal will be carried out at multiple locations across the United States and is scheduled to be completed by September 2026.

What's Favoring Raytheon Technologies?

In recent times, nations have increased their defense spending on military equipment and weaponry to modernize and upgrade defense systems amid rising geopolitical tensions. In such a scenario, radars, which ensure efficient military surveillance and reconnaissance, tend to play an important role in military missions. Backed by such importance in military missions, radars are likely to witness fortified demand in the days ahead.

ADVERTISEMENT

Amid such an increased demand expectation, Raytheon Technologies’ expertise in manufacturing technologically advanced radars may provide an edge to the company for a large inflow of orders. Raytheon has a comprehensive range of radars like APG-79, APG-82, B-52 AESA radars, etc., which allows the company to take advantage of the lucrative radar market.

Backed by such efficiency in manufacturing radars and Raytheon’s continuous investment strategy to improve the technology, the company enjoys a solid inflow of contracts, like the latest one involving the production of radars and providing other related support. This offers RTX a bright revenue generation prospect from the radar arena, which may bolster its overall top line.

Growth Prospects

Per the reports from Mordor Intelligence, the military radar market is expected to witness a CAGR of 4.7% from 2023 to 2028. The expanding market size expectation supports the growth of Raytheon in the military radar market. Other than RTX, defense majors that are continuously expanding radar capabilities to ensure fruitful returns from the radar market are as follows:

Northrop Grumman NOC has been at the forefront of AESA radar innovations for more than 60 years. The AESA radars provide unparalleled battlespace situational awareness and air-to-air and air-to-ground superiority. A few of NOC’s renowned radars are the AN/ASQ-236 Dragon’s Eye Radar Pod, the AN/APG-83 Scalable Agile Beam Radar, F-35 AN/APG-81, etc.

Northrop Grumman has a long-term earnings growth rate of 3.5%. NOC shares have risen 3.3% in the past year.

Lockheed Martin’s LMT radar and electro-optical/infrared sensor systems provide advanced precision targeting, navigation, threat detection and next-generation intelligence, surveillance and reconnaissance capabilities. Its radar product range includes Longbow FCR, AN/APY-9 Radar, Lantirn ER, etc.

Lockheed Martin’s long-term earnings growth rate is pegged at 6.9%. Shares of LMT have returned 7.5% value to investors in the past year.

Kratos KTOS supports strategic missile defense and ground-based radar programs. Its key programs include AN/TPY-2 THAAD, TPQ-53, TPS-77, TPS-78 and SBIRS.

The Zacks Consensus Estimate for KTOS’ 2023 earnings suggests a growth rate of 3.2% from the prior-year reported figure. Kratos shares have increased 27.3% in the past six months.

Price Movement

In the past six months, shares of Raytheon Technologies have rallied 17.5% compared with the industry’s growth of 19.4%.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Zacks Rank

Raytheon Technologies currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

Lockheed Martin Corporation (LMT) : Free Stock Analysis Report

Northrop Grumman Corporation (NOC) : Free Stock Analysis Report

Kratos Defense & Security Solutions, Inc. (KTOS) : Free Stock Analysis Report

Raytheon Technologies Corporation (RTX) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research