Raytheon Technologies Corp. RTX recently clinched a contract for the repair and delivery of APG-65/73 radar systems to support the F/A-18 aircraft. The award has been offered by the Naval Supply Systems Command Weapon Systems Support, Philadelphia, PA.
Valued at $37.7 million, this contract is projected to be completed by October 2024. Work related to this deal will be executed in Indianapolis, IN.
Importance of APG 65/73 Radar
Raytheon’s APG-73 is an all-weather, coherent, multimode and multiwave form search-and-track sensor. It is an upgraded version of APG-65 that provides higher throughputs, greater memory capacity, improved reliability and easier maintenance without associated increases in size or weight.
An upgraded version of the APG series radars incorporates a motion-sensing subsystem with reconnaissance software, a stretch waveform generator module, and a special test equipment instrumentation and reconnaissance module. With these enhancements, the F/A-18 aircraft will have the hardware capability to make high-resolution radar ground maps comparable with those of the F-15E and the U-2 aircraft, enabling it to perform precision strike missions using advanced image correlation algorithms.
Radars & Raytheon
With the rapid escalation of geopolitical tensions globally in recent times, developed and developing nations have been boosting their defense arsenal significantly. Radars constitute a vital part of their defense equipment. While radars have been in use since World War II for locating threats and targets, nowadays, they are being used for multiple purposes like ground surveillance, missile control, fire control, air traffic control, moving target indication, weapons location, and vehicle search.
Demand for military radar systems has expanded manifold in recent times, driven by factors like the rise in defense spending of emerging economies, and an increase in regional tensions and inter-country conflicts that have boosted threats from missiles and aircraft. This, in turn, has been benefiting radar manufacturing companies like Raytheon in the form of contract wins like the latest one.
Notably, Raytheon’s product portfolio consists of varied radars like integrated air and missile defense radars, ballistic missile radars, surveillance radars as well as air dominance radars. Radars like AN-SPY 6, AN-TPY-2, APG-79, APG-82 are some of its combat-proven products that enjoy solid demand in the global military radar market.
Per Fortune Business Insights firm, the global military radar market is expected to reach $22.1 billion by 2028 at a CAGR of 6.3% from 2021. Such growth projections for the aforementioned market should benefit prominent radar manufacturers like Raytheon Technologies, Lockheed Martin LMT, L3Harris Technologies LHX and Northrop Grumman NOC.
Notably, Northrop is a pioneer in Active Electronically Scanned Array (AESA) radars and has been at the forefront of AESA innovations for more than 60 years. The company’s broad portfolio of products comprises radars like AN/APG-83 scalable agile beam radar, AN/ASQ-236 Dragon’s eye radar pod as well as AN/APG-81 and AN/APG-71 for F-35 and F-22 jets, respectively.
Northrop boasts a long-term earnings growth rate of 2.2%. The Zacks Consensus Estimate for 2022 sales indicates an improvement of 1.9% from the 2021 reported figure.
Among Lockheed Martin’s notable radar portfolio, the significant ones include SPY-7, AN/TPQ-53 radar system and AN/APY-9 radar.
Lockheed boasts a long-term earnings growth rate of 5.4%. The stock has gained 21.3% in the past year.
Similarly, L3Harris is the manufacturing company for AN/SPS-48G naval radar, Symphony Airfield Radar Systems and Tactical Air Surveillance radars and a few more.
L3 Harris boasts a long-term earnings growth rate of 3.3%. The stock has gained 9.6% in the year-to-date period.
In the past year, Raytheon Technologies’ shares have rallied 4.2% compared with the industry’s 1.3% rise.
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Raytheon Technologies carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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