RTX Corporation’s RTX business segment, Raytheon, recently secured a contract for providing design agent and engineering support services for the Rolling Airframe Missile (“RAM”). The deal has been provided by the Naval Sea Systems Command, Washington, D.C.
Valued at $18.7 million, the contract is expected to be completed by March 2028. The work related to this deal will be carried out in Tucson, AZ.
What’s Favoring RTX Stock?
RTX's RAM-guided missile armament system is the world's most advanced ship self-defense weapon, designed to provide outstanding protection to ships of all sizes. RAM's newest version, the Block 2 model, offers kinematic and guiding upgrades that enable it to meet new threats, boosting the survivability of the defended ship.
Its passive radio frequency and infrared guidance architecture enable enough firepower to target several threats at the same time, requiring no extra guidance upon launch.
Such notable features of the RAM are likely to have been boosting its demand, which is further evident from the latest contract win. RAM’s solid demand can be further gauged from the fact that it is currently used on more than 165 ships in 11 nations.
Growth Prospects for RTX Stock
Rapidly increasing geopolitical tensions worldwide and heightened regional conflicts in different parts of the globe have prompted nations to bolster their defense capabilities. Since missiles constitute a large share of a nation’s defense arsenals, countries are investing heftily in advanced missile systems for deterrence and defense.
To this end, the Mordor Intelligence firm predicts theglobal marketfor missiles and missile defense systems will witness a CAGR of 5% between 2025 and 2030. This should benefit RTX, which has a handful of combat-proven missiles in its product portfolio, such as the SM-6 missile, Guidance Enhanced Missile, the National Advanced Surface-to-Air Missile System, Tomahawk, Standard Missile 2 and the AIM-9X Sidewinder missiles, in addition to RAM.
Opportunities for Other Defense Companies
As global threats rise, military contractors that are projected to gain from the growth prospects presented by the missiles and missile defense system market are as follows:
The Boeing Company BA: For almost 25 years, the company has been providing air and missile defense systems to the United States, its allies and international partners. Its offerings include the Avenger Air Defense System, Aegis Ballistic Missile Defense and Ground-Based Midcourse Defense.
Boeing boasts a long-term (three to five years) earnings growth rate of 17.4%. The Zacks Consensus Estimate for BA’s 2025 sales implies growth of 25.4% from the 2024 reported figure.
Northrop Grumman NOC: The company provides high-speed, long-range strike weapons like the AARGM-ER, which is a supersonic, air-launched tactical missile system. It also develops and manufactures warheads, fuses, advanced high-speed propulsion systems and other missile components.
Northrop has a long-term earnings growth rate of 4.2%. The Zacks Consensus Estimate for NOC’s 2025 sales suggests growth of 3.2% from the prior-year reported figure.
Lockheed Martin LMT: The company’s Missiles and Fire Control business unit develops, manufactures and supports advanced missiles and rockets. Some of its renowned products are the PAC-3 family of missiles, M270, RRPR and THAAD.
Lockheed has a long-term earnings growth rate of 7.8%. The Zacks Consensus Estimate for LMT’s 2025 sales indicates growth of 4.5% from the prior-year reported figure.
RTX Stock Price Movement
In the past six months, RTX shares have risen 7% against the industry’s decline of 7.1%.
Image Source: Zacks Investment Research
RTX’s Zacks Rank
RTX currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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