Raytheon Technologies (NYSE:RTX) Corp.’s RTX Missiles and Defense segment recently clinched a contract for the production of the 34th lot of Advanced Medium Range Air-to-Air Missile (AMRAA). The deal also includes priced options for the 35th and 36th lot.
Details of the Deal
Valued at $518.4 million, the contract has been awarded by the Air Force Life Cycle Management Center, Eglin Air Force Base, FL. Per the terms, the company will also offer Captive Air Training Missiles (CATMs), guidance sections, AMRAAM Telemetry System (ATS), initial and field spares, and other production engineering support hardware and activities.
Work related to the deal will be executed in Tucson, AZ, and is scheduled to be completed by Dec 31, 2023. This contract involves unclassified Foreign Military Sales (FMS) to Bulgaria, Canada, Denmark, Indonesia, Japan, Portugal, Qatar, Saudi Arabia, Slovakia, South Korea, and Qatar.
AMRAAM’s Importance
Raytheon (NYSE:RTN) Technologies’ AMRAAM is a versatile combat-proven air dominance weapon and enjoys solid demand from varied countries worldwide. This is evident from the latest contract win.
Notably, this missile is currently being used by 37 countries across the globe, including nations such as Norway, Australia, the United Kingdom, Japan, Poland, Kuwait, Qatar, and other allied countries. AMRAAM has been integrated into some of the renowned fighter jets like Boeing’s BA F-15 and F/A-18 as well as Lockheed Martin’s LMT F-22 Raptor and F-35 Lightning.
In 2020, Raytheon Technologies came out with a software update for AMRAAM. This should usher in more contract wins for this particular missile system, thereby boosting revenue growth potential for the company in the coming days.
Looking Ahead
Per a report by Mordor Intelligence, the global Missiles and Missile Defense Systems (MMDS) market value is projected to see a CAGR of over 10% during 2021-2026 time period. The uptick is likely to be driven by growing conflicts between various countries and the increasing number of investments on missile defense systems being made by different countries worldwide, along with rapid technological advancements.
Such impressive projections should bode well for prominent missile makers like Lockheed Martin, Raytheon Technologies and Northrop Grumman Corp. NOC
Price Performance and Zacks Rank
Raytheon Technologies, a Zacks Rank #2 (Buy) stock, has gained 35.4% in the past six months compared with the industry’s growth of 32.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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