Threats of sequestration and budget cuts notwithstanding,
) has gained 2.5% in the past one month. However, the budget
environment is indeed tenuous reflecting on daily trading. The
stock inched down 1.4% on Sep 30 to end the day at $77.07 a
Recently, Raytheon won a $243.5 million contract from the
Pentagon to build 89 new Standard Missile 6 (SM-6) Block I All Up
Rounds for the U.S. Navy. The contract, which runs through Mar
2016, also includes required spare parts and containers.
The SM-6 will facilitate U.S. Navy sailors and their vessels with
extended range protection against fixed- and rotary-wing
aircraft, unmanned aerial vehicles and cruise missiles as a part
of the Naval Integrated Fire Control - Counter Air (NIFC-CA)
Given the declining trend in U.S. defense spending, Raytheon is
considered as one of the best-positioned companies among the
large-cap defense players due to its non-platform-centric focus.
The president's defense budget for FY14 would maintain or augment
funding for most of Raytheon's biggest programs, which include
the Standard Missile-3 (SM-3) missile interceptor, the Advanced
Medium-Range Air to Air Missile and the SM-2 and SM-6 ship
defense missiles. Other programs include AIM-9X Sidewinder,
Evolved SeaSparrow, Javelin anti-tank missile, Joint Standoff
Weapon, Rolling Airframe Missile, Small Diameter Bomb II and
Recently, the company clinched a $136.2 million contract from the
Navy to remanufacture, overhaul and upgrade 19 Phalanx Close-in
Weapon Systems and produce four SeaRAM Anti-ship Missile Defense
The company also remains proactive in picking up international
contracts besides securing sizeable domestic contracts. Last
month, Raytheon debuted with its first border security contract
in Southeast Asia by receiving a Defense Threat Reduction Agency
maritime deal from the Philippines government.
Currently, Raytheon carries a Zacks Rank #2 (Buy). Other
well-placed defense operators include
Lockheed Martin Corp
Northrop Grumman Corp.
Alliant Techsystems Inc.
). While Alliant Techsystems sports a Zacks Rank #1 (Strong Buy),
Northrop and Lockheed Martin hold a Zacks Rank #2 (Buy).
ALLIANT TECHSYS (ATK): Free Stock Analysis
LOCKHEED MARTIN (LMT): Free Stock Analysis
NORTHROP GRUMMN (NOC): Free Stock Analysis
RAYTHEON CO (RTN): Free Stock Analysis Report
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