Raytheon (RTX) Wins $51M Deal to Support MK-31 Missile Program
Raytheon (RTX) is going to provide design agent and engineering support services to support the Rolling Airframe Missile (RAM) upgraded MK-31 Guided M...
Raytheon Technologies Corp.’s RTX business unit, Missiles and Defense, recently clinched a modification contract involving the MK-31 Guided Missile Weapon System Improvement Program. The award has been offered by the Naval Sea Systems Command, Washington, DC.
Details of the Deal
Valued at $54.5 million, the contract is expected to be completed by July 2022. Per the terms, Raytheon will provide design agent and engineering support services to support the Rolling Airframe Missile (RAM) upgraded MK-31 Guided Missile Weapon System Improvement Program.
The contract will serve the U.S. Navy and the government of Japan. The entire task will be executed in Tucson, AZ.
How Will the Deal Favor Raytheon?
Increasing geopolitical tensions across the globe have prompted nations to strengthen their defense systems manifold. With rapid technological upgrades, missile defense has steadily become pivotal in a nation’s defense strategy. With the United States being the world’s largest weapons supplier and Raytheon being a prominent U.S. missile-maker, increased missile defense adoption by nations worldwide offers the company solid growth opportunities.
Raytheon’s MK-31 weapon system is the most modern self-defense weapon system, deployed from ships to destroy anti-ship missiles, and has the capability to protect ships of all sizes. With these advanced weaponries in its portfolio, Raytheon enjoys solid demand in the defense space. The latest contract win is an instance of that. This, in turn, is expected to boost the company’s top-line performance in the coming quarters.
Per a report by Fortune Business Insights, the global rocket and missile market is projected to grow from $52.5 billion in 2019 to $71.8 billion by 2027, at a CAGR of 4.52%. Such massive growth projections indicate solid opportunities for Raytheon Technologies, Northrop Grumman NOC, Lockheed Martin LMT, and Boeing BA, which specialize in developing technologically advanced missiles.
Lockheed Martin’s missile defense program includes the Patriot Advanced Capability-3 (PAC-3) and Terminal High Altitude Area Defense (THAAD) air and missile defense programs. It also manufactures the Multiple Launch Rocket System (MLRS), Joint Air-to-Surface Standoff Missile (JASSM), and Javelin tactical missile programs, alongside other tactical missiles.
Likewise, Boeing’s Integrated Air & Missile Defense portfolio includes Arrow 3, which offers regional missile defense capabilities to enable an effective response to short- and medium-range ballistic missiles.
Similarly, Northrop Grumman’s missile defense program includes AGM-88E advanced anti-radiation guided missiles (AARGM), Ground Based Strategic Deterrent (GBSD) weapon system, and rocket propulsion systems. Earlier this month, the U.S. Air Force awarded Northrop Grumman a $13.3-billion contract to replace its aging stock of intercontinental ballistic missiles.
In the past year, Raytheon Technologies’ shares have gained 38.9% compared with the industry’s 31% growth.
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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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