Advertisement
Canada markets closed
  • S&P/TSX

    22,690.39
    -36.37 (-0.16%)
     
  • S&P 500

    5,505.00
    -39.59 (-0.71%)
     
  • DOW

    40,287.53
    -377.49 (-0.93%)
     
  • CAD/USD

    0.7285
    -0.0013 (-0.17%)
     
  • CRUDE OIL

    80.25
    -2.57 (-3.10%)
     
  • Bitcoin CAD

    92,901.06
    +967.38 (+1.05%)
     
  • CMC Crypto 200

    1,384.56
    +53.66 (+4.03%)
     
  • GOLD FUTURES

    2,402.80
    -53.60 (-2.18%)
     
  • RUSSELL 2000

    2,184.35
    -13.94 (-0.63%)
     
  • 10-Yr Bond

    4.2390
    +0.0500 (+1.19%)
     
  • NASDAQ

    17,726.94
    -144.28 (-0.81%)
     
  • VOLATILITY

    16.52
    +0.59 (+3.70%)
     
  • FTSE

    8,155.72
    -49.17 (-0.60%)
     
  • NIKKEI 225

    40,063.79
    -62.56 (-0.16%)
     
  • CAD/EUR

    0.6690
    -0.0003 (-0.04%)
     

RTX Secures a Contract to Build AN/APY-10 Radar Systems

RTX Corp. RTX recently secured a contract involving its AN/APY-10 Radar Systems. The award has been offered by the Naval Air Systems Command, Patuxent River, MD.

Details of the Deal

Valued at $35 million, the contract is expected to be completed by September 2028. Per the terms of the deal, RTX will manufacture and supply 18 AN/APY-10 Radar Systems for the P-8A Poseidon aircraft.

Of these 18 radars, 14 will be delivered to the government of Canada, three to Germany’s government and one to the U.S. Navy. Work related to this deal will be executed in McKinney, TX.

RTX & Radars

With the rapid escalation of geopolitical tensions globally in recent times, nations across the globe have been significantly boosting their defense arsenal. Since radars constitute a vital part of this arsenal, escalation in defense spending has been boosting investments in radars as well.

ADVERTISEMENT

To this end, it is imperative to mention that while radars have been in use since World War II for locating threats and targets, they are being used today for multiple purposes like ground surveillance, missile control, fire control, moving target indication, weapons location and vehicle search.

This must have been ushering in solid order flow for radar manufacturing companies like RTX in the form of contract wins like the latest one. Notably, RTX’s AN/APY-10 is a multi-mission maritime and overland surveillance radar developed for the Boeing P-8 Poseidon maritime patrol and surveillance aircraft. It is capable of performing long-range surface search and target tracking, periscope detection as well as ship imaging.

RTX’s Growth Prospects

The demand for military radar systems has expanded manifold in recent times, driven by factors like the rise in defense spending of emerging economies, increase in regional tensions and inter-country conflicts that have boosted threats from missiles and aircraft.

This has set the stage for ample growth opportunities for the military radar market and must have prompted the Morder Intelligence firm to project a CAGR of 5.2% during 2024-2029 for the aforementioned market. Such growth projections bode well for prominent radar manufacturers like RTX.

Impressively, RTX’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-TPY-2, APG-79, AN/SPY-6 and APG-82 are some of the company’s combat-proven products that enjoy solid demand in the global military radar market, apart from AN/APY-10.

Opportunities for Peers

RTX apart, other defense contractors that are major radar manufacturers and thus expected to benefit from the growth opportunities offered by the global military radar market are discussed below:

Lockheed Martin LMT: Its radars are the choice of more than 45 nations on six continents. The company’s product portfolio includes various radar systems like AN/APY-9 radar, airborne ground surveillance radar systems, AN/TPQ-53 radar systems, SPY-7, the long-range discrimination radar, FPS-117 and a few more.

Lockheed boasts a long-term earnings growth rate of 4.10%. The Zacks Consensus Estimate for 2024 earnings implies an improvement of 3.2% from the 2023 reported figure.

L3Harris Technologies LHX: The company manufactures combat-proven radars like SPS-48, land-based surveillance radar, AN/APY-11 Multimode radar, Tactical Air Surveillance radar, AN/SPS-48G Long range 3D surveillance radar and many more.  Notably, its Vigilant family of software-defined, radar electronic support measures solutions is essential for survival and dominance in the electromagnetic threat environment of the modern battlefield.

L3Harris boasts a long-term earnings growth rate of 9.2%. The Zacks Consensus Estimate for 2024 earnings implies an improvement of 9.4% from the 2023 reported figure.

Northrop Grumman NOC: As a pioneer in Active Electronically Scanned Array (AESA) radars, NOC has been at the forefront of AESA innovations for more than 60 years. Its diverse product portfolio includes a handful of other radars like the F-35 fire control radar and the Distributed Aperture System, the LONGBOW Fire Control Radar, the Scalable Agile Beam Radar, the APR-39 DV (2) digital radar warning receiver and a few more.

Northrop boasts a long-term earnings growth rate of 8.7%. The Zacks Consensus Estimate for 2024 sales implies an improvement of 4.6% from the 2023 reported figure.

Price Performance

The company’s shares have risen 12.4% in the past year against the industry’s decline of 8.4%.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Zacks Rank

RTX 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

L3Harris Technologies Inc (LHX) : Free Stock Analysis Report

RTX Corporation (RTX) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research