Raytheon (RTX) Arm Wins $182M NASAMS Contract for Ukraine
Raytheon Technologies Corp.’s RTX Missiles and Defense unit recently clinched a $182-million contract to supply the National Advanced Surface-to-Air Missile System (NASAMS) to Ukraine to provide the region with an effective air defense solution against Russia’s assault.
Significance of NASAMS
NASAMS provides air defenders with a tailorable, state-of-the-art defense system that can maximize their ability to identify, engage and destroy the current and evolving enemy aircraft, unmanned aerial vehicles and emerging cruise missile threats.
Its impressive portfolio of products provides a wide variety of ammunition solutions for the military to arm them against any sudden assault. In this context, it is imperative to mention that its product portfolio comprises the Sentinel radar, Advanced Medium-Range Air-to-Air Missile and Kongsberg’s Defence & Aerospace (KDA) Fire Distribution Center.
The company continuously upgrades the system with new technologies, capabilities and features to meet the rapidly changing defense warfare requirements.
Undoubtedly, buoyed by its remarkable portfolio and technologically advanced features, NASAMS is proudly owned by 12 countries worldwide apart from the United States.
Such strength in customers entails NASAMS-proven defense capability amid the current geopolitical tension. Going forward, Raytheon Technologies may continue to witness a steady inflow of orders involving NASAMS. The latest contract win is a testament to that. This, in turn, shall boost RTX’s revenues from the Missiles and Defense business unit.
Growth Prospects
The tiff between Ukraine and Russia has resulted in other nations to increase their defense spending to upgrade their defense portfolio of arms and ammunitions. In this regard, investments in missiles may take a northward trend as nations look to advance the air-to-air defense strategy and meet the current battlefield challenges.
Per the report from Mordor Intelligence, the missiles and missile defense system market is poised to expand at a CAGR of 4.9% over the 2022-2027 period. This, in turn, must benefit Raytheon along with defense primes that enjoy an established position in the missile market, such as:
Northrop Grumman NOC is a prominent developer of missile systems and counter systems, including strategic deterrents, and subsystems and components. It also designs and produces missile products, including advanced high-speed propulsion systems, fuses, warheads and controls for air, sea and land-based systems.
Northrop Grumman has a long-term earnings growth rate of 2.2%. NOC’s investors have gained 32% in the past year.
Lockheed Martin’s LMT Trident II D5 is the latest generation of the U.S. Navy's submarine-launched fleet ballistic missiles following the highly successful Polaris, Poseidon and Trident I C4 programs. Trident missiles are carried by 14 U.S. Navy Ohio-class submarines with American warheads and four Royal Navy Vanguard-class submarines with British warheads.
Lockheed Martin’s long-term earnings growth rate is pegged at 5.5%. Shares of LMT have returned 19.1% value to investors in the past year.
General Dynamics’ GD Ordnance and Tactical Systems are the system integrators of the 2.75-inch Hydra-70 family of rockets. It also produces composite rocket motor cases and launches tubes for tactical and strategic missiles.
General Dynamics boasts a long-term earnings growth rate of 10.2%. GD stock has appreciated 16.8% in the past year.
Price Movement
In the past year, shares of Raytheon Technologies have rallied 10.3% compared with the industry’s growth of 4%.
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.
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Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
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