RTX's Unit Secures a Contract to Aid Standard Missile-6 Program

RTX Corporation’s RTX unit, Raytheon, recently secured a $18.3 million modification contract for exercising an option for the manufacturing, assembly, testing and delivery of Standard Missile-6 (SM-6) Tactical All-Up Rounds to support the program’s full-rate production. The award has been provided by the Naval Sea Systems Command, Washington, D.C.

The majority of the work related to this contract will be performed in Tucson, AZ, and East Camden, AR. This contract is projected to be completed by May 2029.

What’s Favoring RTX Stock?

Rising military conflicts, terrorism and border disputes have led nations to increase their focus on national security, particularly on missile defense systems in recent times, backed by the rapid development of advanced missile technologies over the last decade.

This is likely to have prompted the Mordor Intelligence firm to forecast a compound annual growth rate of 5% for the global missiles and missile defense system market during the 2025-2030 period.

Such massive growth projections offer a strategic advantage to RTX, which has a handful of combat-proven missiles in its product portfolio, like the TOW missile, Guidance Enhanced Missile, Advanced Medium Range Air-to-Air Missile, Tomahawk and a few more, in addition to the SM-6.

In particular, SM-6 missile defends against air, surface and ballistic threats, offering cost-effective protection for 60 naval ships. With more than 500 units delivered to the U.S. Navy, its advanced features continue to drive demand, further corroborated by the latest contract award.

Prospects for Other Defense Stocks

Other defense contractors that are likely to enjoy the perks of the expanding missiles and missile system market have been discussed below:

Northrop Grumman 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 3.3%. The Zacks Consensus Estimate for NOC’s 2025 sales indicates year-over-year growth of 2.8%.

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 for nearly 25 years against threats ranging from intercontinental ballistic missiles to hostile aircraft.

The company has a long-term earnings growth rate of 18.1%. The Zacks Consensus Estimate for BA’s 2025 sales indicates year-over-year growth of 25.6%.

Lockheed Martin 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 10.5%. The Zacks Consensus Estimate for LMT’s 2025 sales indicates year-over-year growth of 4.7%.

RTX Stock’s Price Movement

RTX shares have risen 27.9% in the past six months compared with the industry’s 19.7% growth.

RTX’s Zacks Rank

RTX currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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