Yahoo Finance Raytheon (RTX) Wins Deal to Supply F135 Propulsion System Parts
Raytheon Technologies Corp.’s RTX business unit, Pratt & Whitney, recently secured a modification contract for F135 propulsion systems. The award has been offered by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $619.1 million, the contract is projected to get completed by October 2030. Per the terms of the deal, Raytheon will supply long-lead materials, parts and components for the 17th lot’s F135 propulsion systems to support the F-35 Lighting II Joint Strike Fighter aircraft.
The contract also entails the production and delivery of four F135-PW-600 propulsion systems to support F-35 jets.
The deal will serve the U.S. Air Force, Marine Corps, Navy, non-U.S. Department of Defense partners and Foreign Military Sales (“FMS”) customers. A major portion of the work related to this contract will be executed in Windsor Locks, CT, and Indianapolis, IN.
Raytheon’s Growth Prospects
Combat aircraft witnessed a surge in demand with the rapid rise in political risks and global terrorism. In this context, F-35 jets, built by America’s largest defense contractor, Lockheed Martin LMT, enjoy a lucrative position in the combat aircraft arena and witness a steady flow of orders from the U.S. Army, seven international partner countries and eight FMS customers.
Lockheed Martin delivered 841 F-35 airplanes since the program's inception, with 271 jets in the backlog as of September 2022. The strong international demand for F-35 in the first three quarters of 2022 resulted in multiple order wins for LMT and RTX.
Further, the production of F-35 jets is expected to continue for many years ahead, given the U.S. government's current inventory target of 2,456 aircraft for the Air Force, Marine Corps and Navy.
Consequently, Pratt & Whitney, which builds F-35’s engine, may expect to witness more order inflows for the F-35 engine and its propulsion system in the coming days, like the latest one. This should significantly bolster this defense contractor’s top line.
Peer Growth
Apart from Lockheed Martin and Raytheon, defense majors that stand to benefit from the expanding production rates of F-35 are as follows:
Northrop Grumman NOC renders its expertise in carrier aircraft and low-observable stealth technology for the F-35 program. A pioneer in the development of manned combat aircraft, Northrop has a tradition of providing technological leadership in all aspects of military aviation and aircraft.
Northrop Grumman has a long-term earnings growth rate of 3.3%. NOC’s investors have gained 39.5% in the past year.
BAE Systems’ BAESY short takeoff and vertical landing experience and air systems sustainment support F-35’s combat capabilities. The company provides an electronic warfare suite for F-35, which includes fully integrated radar warning, targeting support and self-protection to detect and defeat surface and airborne threats.
BAE Systems boasts a long-term earnings growth rate of 13.2%. BAESY stock has appreciated 46.6% in the past year.
Price Movement
In the past year, shares of Raytheon Technologies have rallied 18.1% compared with the industry’s growth of 8.5%.
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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
Bae Systems PLC (BAESY) : Free Stock Analysis Report
Raytheon Technologies Corporation (RTX) : Free Stock Analysis Report
