The Missiles and Defense division of Raytheon Technologies Corp. (NYSE:RTX), has signed a contract concerning the Rolling Airframe Missile (RAM) Block 2B Guided Missile. The contract was granted by the Naval Sea Systems Command in Washington, D.C.

This contract for procurement services for the RAM Block 2B Guided Missile has $43.6 million estimated value. The deal-related work will be done in Tucson, Arizona, and is expected to be finished by January 2026.

The Significance of RAM-Guided Missiles

The RAM Guided Missile weapon system is the most advanced ship self-defense weapon in the world, and it’s made to offer top-notch defense for ships of all sizes. The fact that this missile is currently installed on 165 ships in 11 different countries demonstrates how in demand it is.

The RAM missile’s Block 2 variant, the most recent development, has a larger rocket motor, an improved control system, and an improved RF receiver that can pick up even the most stealthy threat emitters.

The modifications increase the missile’s maneuverability by 2.5 times and its effective intercept range by 1.5 times. This boosts the defended ship’s survivability by enabling the Block 2 variant to defeat highly stressful threats.

Raytheon Technologies continues to receive numerous orders for the missile, including the most recent one, as a result of the missile’s remarkable features. This will increase RTX’s Missiles and Defense business unit revenue.

Future Possibilities

Many countries have recently increased their defense spending as a result of the conflict between Russia and Ukraine in order to fortify their defense infrastructure and thwart any unexpected attacks. Given this situation, the demand for missiles—a crucial component of a successful defense system—may increase in the future.

The market for missiles and missile defense systems is anticipated to grow at a CAGR of 4.8% from 2023 to 2028, according to reports from Mordor Intelligence. Such burgeoning growth forecasts favor Raytheon, which has a robust line-up of effective missiles.

In addition to RTX, the following defense majors could gain from the growing missile market size:

Northrop Grumman (NYSE:NOC)  is a well-known producer of strategic deterrents, subsystems, and components for missile systems and counter systems. In order to improve its position in the missile market, Northrop purchased Orbital ATK in 2018, a company that had once been a market leader in the supply of missile parts for air, sea, and land-based systems.

The long-term earnings growth rate for Northrop is 3.5%. In the last six months, it has returned 1.9% to investors.

The Missiles and Fire Control business unit of Lockheed Martin (NYSE:LMT) creates, produces, and maintains cutting-edge battle, missile, rocket, manned, and unmanned systems for military clients. The M270, RRPR, THHAD, and the PAC-3 family of missiles are a few of its products.

The projected long-term earnings growth rate for Lockheed Martin is 6.9%. In the last year, LMT stock has returned 6.7% of its value to investors.

The 2.75-inch Hydra-70 rocket family’s Ordnance and Tactical Systems division of General Dynamics (GD Quick QuoteGD – Free Report) is responsible for system integration. Additionally, it makes launch tubes for tactical and strategic missiles as well as composite rocket motor cases.

The long-term earnings growth rate for General Dynamics is 8.6%. According to the Zacks Consensus Estimate, GD’s earnings are expected to increase by 4.5% over the prior year’s reported amount in 2023.

Price Change

Shares of Raytheon Technologies have increased 15.8% over the last six months, outpacing the industry’s 18.2% rise.

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