Raytheon Technologies Corp.’s RTX Missiles and Defense unit recently clinched a modification contract to provide support services for the Dual Band Radar (DBR) program. The Naval Sea Systems Command, Washington, D.C. awarded the deal.
Details of the Deal
Valued at $19.1 million, this contract includes support services in engineering efforts for DBR. The work related to this deal will be carried out in multiple locations across the United States and is scheduled to be completed by June 2022.
Significance of Dual Band Radar
The DBR program is the first radar system of the U.S. Navy fleet capable of simultaneously operating on two frequency ranges (S-band and X-band) coordinated by a single resource manager. It combines the functionality of the X-band AN/SPY-3 Multifunction Radar and the S-band Volume Surveillance Radar (VSR) to provide an unprecedented level of performance and capability to detect and track hostile targets.
DBR can operate 24x7 during extended missions with an operational availability of greater than 95%. Additionally, DBR requires no dedicated operator or manned display consoles and is directed by the command and control-level personnel through the Ship Self Defense System, an open-architecture solution that integrates all of the ship's systems through a single enterprise network.
Due to its remarkable features that can effectively assist in military operations, Raytheon Technologies continues to witness a steady inflow of orders involving the radar system. The latest contract win is a testament to that. This, in turn, shall boost RTX’s revenues from the radars arena.
Prospects for Raytheon Technologies
Nations are strengthening their defense capabilities amid the rising geopolitical tensions. In this context, demand for an effective radar system, which boasts the features of next-generation technology-based warfare capabilities, has been gaining momentum due to the system’s growing importance in military surveillance.
Per the report from Mordor Intelligence, the global military radars market is anticipated to witness a CAGR of 4.5% during the 2022-2031 period. This exhibits strong growth prospects for Raytheon Technologies, which boasts a product portfolio consisting of varied radars like integrated air and missile defense radars, ballistic missile radars, surveillance radars and air dominance radars. Such diversity in radar system technology tends to provide a competitive edge for the company in the military radar system market.
Peer Growth
Considering the aforementioned growth prospects, defense majors who have carved out a position in the military radar market to enjoy the perks of the expanding market are:
Northrop Grumman NOC has been at the forefront of active electronically scanned array radar innovations for more than 60 years. The AESA radars provide unparalleled battlespace situational awareness and air-to-air and air-to-ground superiority. A few of Northrop Grumman’s renowned radars are the AN/AAQ-24(V) Directional Infrared Countermeasure system, the AN/APG-77 AESA radar and the AN/APG-81 AESA fire control radar.
Northrop Grumman has a long-term earnings growth rate of 6.2%. NOC’s investors have gained 35.9% in the past year.
Lockheed Martin LMT is pioneering the latest radar systems and technology. Its product portfolio consists of varied radars like Longbow FCR, AN/APY-9, IRST21 Sensor System, LANTIRN ER, Legion Pod and M-TADS/PNVS, which are some of its combat-proven products that enjoy solid demand in the global military radar market.
Lockheed Martin’s long-term earnings growth rate is pegged at 5.7%. Shares of LMT have returned 20.7% value to investors in the past year.
BAE Systems BAESY is at the forefront of radar tracking technology, delivering systems that provide precision tracking data to range commanders with superior situational awareness and various target-tracking solutions. It delivered numerous state-of-the-art land-based fixed, transportable, mobile and shipborne precision Time Space and Position Information tracking radar systems to domestic and international customers.
BAE Systems boasts a long-term earnings growth rate of 5.3%. BAESY stock has appreciated 40.2% in the past year.
Price Movement
In the past year, shares of Raytheon Technologies have rallied 32.6% compared with the industry’s growth of 14.9%.
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Zacks Rank
Raytheon Technologies currently carries a Zacks #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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