RTX Secures $230M Defense Contract for F135 Propulsion Systems
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Should l Buy RTX?
Source: seekingalpha
- Contract Value: RTX has been awarded a not-to-exceed $230 million fixed-price-incentive contract to procure long-lead materials, parts, and components for the F135 Lot 20 propulsion system, ensuring timely delivery schedules.
- Production Support: This contract supports the production of 138 propulsion systems for the U.S. Air Force, Marine Corps, and Navy, while also catering to non-U.S. Department of Defense partners and Foreign Military Sales customers, highlighting RTX's influence in international markets.
- Funding Allocation: At the time of the award, $35 million in fiscal 2025 aircraft procurement funds, approximately $26 million in additional fiscal 2025 aircraft procurement funds, around $42 million from non-U.S. DOD partners (Navy), and about $126 million in FMS funds will be obligated, ensuring ample project financing.
- Project Completion Timeline: Work under this contract is expected to be completed by May 2031, indicating RTX's commitment and capability in long-term defense projects, further solidifying its position in the defense industry.
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Analyst Views on RTX
Wall Street analysts forecast RTX stock price to fall
14 Analyst Rating
9 Buy
5 Hold
0 Sell
Moderate Buy
Current: 201.140
Low
168.00
Averages
195.77
High
215.00
Current: 201.140
Low
168.00
Averages
195.77
High
215.00
About RTX
RTX Corporation is an aerospace and defense company, which provides advanced systems and services for commercial, military, and government customers worldwide. The Company operates through three segments: Collins Aerospace, Pratt & Whitney, and Raytheon. Collins Aerospace segment provides technologically advanced aerospace and defense products and aftermarket service solutions for civil and military aircraft manufacturers, commercial airlines, and regional, business and general aviation, as well as for defense and commercial space operations. The Pratt & Whitney segment supplies aircraft engines for commercial, military, business jet, and general aviation customers. The Raytheon segment provides defensive and offensive threat detection, tracking and mitigation capabilities for the United States and foreign government and commercial customers. The Raytheon designs, develops, and provides advanced capabilities in integrated air and missile defense, smart weapons, missiles and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Lockheed Martin's Gains: Among these deals, Lockheed Martin secured a $9 billion contract for 730 PAC-3 MSE missiles from Saudi Arabia, making it the largest beneficiary and further solidifying its leadership position in the global defense market.
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- Lockheed Martin's Gains: Among these deals, Lockheed Martin secured a $9 billion contract for 730 PAC-3 MSE missiles from Saudi Arabia, making it the largest beneficiary and further solidifying its leadership position in the global defense market.
- Boeing's Contract: Boeing won a $2.3 billion contract in Singapore for four P-8A Poseidon patrol aircraft and their weapon systems, although RTX will not gain additional revenue, Boeing's defense division is expected to improve its financial performance.
- Israel's Order: Israel placed a $3.8 billion order for 30 AH-64E Apache attack helicopters and related equipment from Boeing and Lockheed Martin, reflecting Israel's ongoing demand for advanced military equipment and further driving growth for both companies in the international market.
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- Boeing's Contract: Boeing won a $2.3 billion contract on January 20 for Singapore's purchase of four P-8A Poseidon patrol aircraft, which, despite its defense division still being unprofitable, will provide crucial cash flow that may improve its financial standing.
- Israeli Orders: Israel is ordering 30 AH-64E Apache attack helicopters and related equipment from Lockheed and Boeing for a total of $3.8 billion, showcasing the strong competitive edge of both companies in the global defense market while laying a foundation for future growth.
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- Funding Redirection: The State Department redirected funds from other Iran internet freedom programs to acquire SpaceX devices after purchasing nearly 7,000 terminals, indicating a strategic shift in U.S. policy towards supporting dissent in Iran.
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- AI and Automation in Warfare: The Department of Defense emphasizes the increasing importance of automation, autonomy, and artificial intelligence in warfare, pushing contractors to enhance output, reduce costs, and build a lasting software advantage, which could enable defense firms to achieve margins similar to those in commercial aerospace or technology sectors.
- Valuation Concerns for Defense Stocks: Despite a nearly 100% rally in defense stocks raising valuation concerns, this surge appears grounded in fundamentals, as governments commit to multi-year budget increases, geopolitical tensions remain high, and global missile and munitions inventories are depleted, making defense a clear policy priority for the U.S. and NATO allies.
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