RTX Corporation’s RTX business segment, Raytheon, recently won a $192 million modification contract to upgrade the Next Generation Jammer Mid-Band Expansion (NGJ-MB) system. The contract was provided by the U.S. Navy.
Details of the Deal Secured by RTX
Per the terms of the deal, RTX will develop the NGJ-MBX system, which is an upgraded version of its existing Next NGJ-MB system. The latest modification will extend the frequency range of the NGJ-MB system to counter additional threats, as MBX provides additional capabilities, which should improve the operational effectiveness of the NGJ-MB.
The work related to this deal will be executed in Dallas, TX; Forest, MI; El Segundo, CA, and Fort Wayne, IN, through 2027.
Significance of RTX’s NGJ-MB System
Raytheon's NGJ-MB is a jamming system that improves airborne electronic attack capabilities for EA-18G Growler fighter aircraft. The NGJ-MB is the U.S. Navy's sophisticated electronic attack system designed to destroy enemy technology, such as air defense systems and communication tools. The NGJ-MB employs digital, software-based and Active Electronically Scanned Array technology, allowing operators to non-kinetically attack more targets at longer distances.
What’s Favoring RTX?
Rising geopolitical tensions globally have prompted countries to enhance their military capabilities, including electronic warfare (EW) systems, by increasing spending on the production and modernization of varied programs. During the past decade, the utilization of cutting-edge technology in EW systems has rapidly evolved, making them an essential component of any country's defensive architecture.
To this end, the Mordor Intelligence firm predicts the Electronic Warfare market to witness a CAGR of 5.1% during the 2024-2029 period. This should benefit EW system manufacturers like RTX in the form of steady order flows from the Pentagon and other U.S. allies for advanced EW systems like NGJ-MB. The latest contract win is a bright example of that.
Prospects for RTX’s Peers
Other defense contractors that are expected to reap the benefits of the expanding EW market are listed below:
L3Harris Technologies LHX: It manufactures electronic warfare systems like AN/ALQ-214 (IDECM) F/A-18 Countermeasure System, Viper Shield AN/ALQ-254(V)1 All-digital Electronic Warfare Suite, CREW Vehicle Receiver/Jammer and The Next Generation Jammer-Low Band.
L3Harris has a long-term (three to five years) earnings growth rate of 8.9%. The Zacks Consensus Estimate for LHX’s 2024 sales suggests growth of 9.6% from the prior-year reported figure.
Lockheed Martin LMT: It provides global ground EW solutions to U.S. forces as well as partner nations through a unique next-generation open architecture product platform and open business model. Its Advanced Off-Board Electronic Warfare program delivers persistent electronic surveillance and attack capability against naval threats like anti-ship missiles.
Lockheed boasts a solid long-term earnings growth rate of 4.7%. The consensus estimate for LMT’s 2024 sales indicates a 5.3% improvement from the prior year's reported figure.
Northrop Grumman NOC: The company has been providing Naval Airborne Electronic Warfare solutions for more than 55 years. Some of its EW systems include the ALQ-251 radio frequency countermeasures system and the AN/APR-39 Radar Warning Receiver/Electronic Warfare Management System.
NOC boasts a solid long-term earnings growth rate of 8.7%. The Zacks Consensus Estimate for its 2024 sales indicates year-over-year growth of 5.4%.
Price Movement
In the past six months, shares of RTX have risen 24.9% compared with the industry’s growth of 9.3%.
Image Source: Zacks Investment Research
Zacks Rank
RTX currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
