RTX Secures $369.9M Modification for F135 Program
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 16 hours ago
0mins
Should l Buy RTX?
Source: seekingalpha
- Significant Contract Value: RTX has secured a $369.9 million modification to a fixed-price incentive contract aimed at procuring Lot 21 F135 engines and long-lead materials, which ensures stability and reliability in future engine production.
- Clear Delivery Timeline: The contract supports the delivery of 138 propulsion systems under Lot 20, with all work expected to be completed by May 2031, which not only meets customer demands but also enhances RTX's competitiveness in the defense market.
- Funding Assurance: Approximately $157.2 million in Foreign Military Sales (FMS) funds is expected to be awarded for FY25-26, with these funds not expiring this fiscal year, ensuring liquidity and continuity for the project.
- Contracting Authority: The Naval Air Systems Command serves as the contracting authority, indicating government trust and support for RTX in the propulsion systems sector, further solidifying RTX's position among defense contractors.
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Analyst Views on RTX
Wall Street analysts forecast RTX stock price to rise
14 Analyst Rating
9 Buy
5 Hold
0 Sell
Moderate Buy
Current: 179.300
Low
168.00
Averages
195.77
High
215.00
Current: 179.300
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.
RTX Secures $369.9 Million Boost to Navy Contract
- Contract Boost: RTX has secured a $369.9 million increase to its contract with the US Navy, aimed at enhancing collaboration and strengthening its market position in the defense sector.
- Procurement Focus: The additional funding will be allocated for the procurement of critical technologies and equipment, expected to significantly enhance the Navy's operational capabilities and technological advancements, thereby bolstering national security.
- Market Impact: This contract increase not only reflects the US government's trust in RTX's technologies but also has the potential to provide the company with long-term revenue growth and stable cash flow.
- Strategic Importance: By deepening its collaboration with the Navy, RTX is positioned to further solidify its leadership in the defense industry and pave the way for future contract opportunities.
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- Traditional ETFs Underperform: In contrast, the iShares US Aerospace & Defense ETF has dropped 10% during the same period, with top holdings including GE Aerospace, RTX Corp, and Boeing, reflecting a cautious sentiment towards traditional defense stocks.
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RTX Secures $369.9M Modification for F135 Program
- Significant Contract Value: RTX has secured a $369.9 million modification to a fixed-price incentive contract aimed at procuring Lot 21 F135 engines and long-lead materials, which ensures stability and reliability in future engine production.
- Clear Delivery Timeline: The contract supports the delivery of 138 propulsion systems under Lot 20, with all work expected to be completed by May 2031, which not only meets customer demands but also enhances RTX's competitiveness in the defense market.
- Funding Assurance: Approximately $157.2 million in Foreign Military Sales (FMS) funds is expected to be awarded for FY25-26, with these funds not expiring this fiscal year, ensuring liquidity and continuity for the project.
- Contracting Authority: The Naval Air Systems Command serves as the contracting authority, indicating government trust and support for RTX in the propulsion systems sector, further solidifying RTX's position among defense contractors.
See More
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See More
RTX Secures $369.9 Million Boost to Navy Contract
- Contract Boost: RTX has secured a $369.9 million increase to its contract with the US Navy, aimed at enhancing collaboration and strengthening its market position in the defense sector.
- Procurement Focus: The additional funding will be allocated for the procurement of critical technologies and equipment, expected to significantly enhance the Navy's operational capabilities and technological advancements, thereby bolstering national security.
- Market Impact: This contract increase not only reflects the US government's trust in RTX's technologies but also has the potential to provide the company with long-term revenue growth and stable cash flow.
- Strategic Importance: By deepening its collaboration with the Navy, RTX is positioned to further solidify its leadership in the defense industry and pave the way for future contract opportunities.
See More
Aerospace and Defense ETFs Attract Investor Interest
- Strong Performance of Space ETFs: Since the onset of the Iran War on February 28, the Procure Space ETF (UFO) has surged nearly 19%, while the Global X Defense Tech ETF (SHLD) has declined by 8%, highlighting the investment appeal and volatility of the space theme.
- Traditional ETFs Underperform: In contrast, the iShares US Aerospace & Defense ETF has dropped 10% during the same period, with top holdings including GE Aerospace, RTX Corp, and Boeing, reflecting a cautious sentiment towards traditional defense stocks.
- Optimistic Investment Outlook: Analyst Murphy emphasizes that geopolitical tensions will continue to drive interest in aerospace and defense stocks, with expectations of increased government investments in new technologies over the next five to ten years, further boosting growth in this sector.
- SpaceX IPO Sparks Enthusiasm: As the SpaceX initial public offering approaches, market interest in space exploration and investment has significantly increased, with analysts believing this will create more investment opportunities for related stocks.
See More
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- UnitedHealth Performance: UnitedHealth Group (UNH) has seen a 0.6% decline in stock price over the past six months, compared to a 3.4% drop in the HMO industry, indicating rising medical cost pressures, although Q1 earnings exceeded estimates with total revenue expected to surpass $439 billion in 2026.
- Morgan Stanley Growth: Morgan Stanley (MS) shares have risen 17.4% over the past six months, outperforming the investment banking industry’s 6.2%, with Q1 results showcasing strength in capital markets and the acquisition of EquityZen expected to enhance client relationships and drive revenue growth.
- RTX Strong Orders: RTX Corporation (RTX) has outperformed with a 2.1% stock price increase over the past six months, with Q1 earnings beating expectations and a robust order backlog of $271 billion supporting future growth, despite uncertainties from U.S. government import tariffs.
- Microcap Underperformance: United Homes Group (UHG) has underperformed with a 32.4% stock price decline over the past six months, reflecting weak demand and declining orders, although product repositioning and cost reengineering are supporting structural margin resilience.
See More
RTX Secures $369.9M Modification for F135 Program
- Significant Contract Value: RTX has secured a $369.9 million modification to a fixed-price incentive contract aimed at procuring Lot 21 F135 engines and long-lead materials, which ensures stability and reliability in future engine production.
- Clear Delivery Timeline: The contract supports the delivery of 138 propulsion systems under Lot 20, with all work expected to be completed by May 2031, which not only meets customer demands but also enhances RTX's competitiveness in the defense market.
- Funding Assurance: Approximately $157.2 million in Foreign Military Sales (FMS) funds is expected to be awarded for FY25-26, with these funds not expiring this fiscal year, ensuring liquidity and continuity for the project.
- Contracting Authority: The Naval Air Systems Command serves as the contracting authority, indicating government trust and support for RTX in the propulsion systems sector, further solidifying RTX's position among defense contractors.
See More
Honeywell's Disappointing Q1 Results but Positive Outlook Ahead
- Earnings Highlights: Honeywell's adjusted earnings per share rose 10.1% year-over-year to $2.45, surpassing LSEG's estimate of $2.32, although adjusted revenue grew only 2.4% to $9.1 billion, missing the expected $9.3 billion, indicating resilience in profitability despite challenges.
- Divestiture Plans: The company announced the sale of its Workflow Solutions business in an all-cash transaction, expected to close in the second half of 2026, which is anticipated to enhance shareholder value, as management believes the remaining automation company will be more attractive post-spin-off.
- Market Reaction: Despite an initial drop of over 5% in stock price following the earnings report, the stock rebounded to a 3% decline as management discussed the transformation strategy, leading investors to view the sell-off as a buying opportunity due to future growth potential.
- Future Outlook: Management's outlook for 2026 remains unchanged, with projected sales between $9.4 billion and $9.6 billion, despite facing a $200 million inflation headwind, indicating the company's adaptability in uncertain environments, supported by strong performance in Building and Industrial Automation.
See More
U.S. Deploys Unmanned Naval Systems in Strait of Hormuz
- Unmanned Systems Advantage: The U.S. military's deployment of next-generation unmanned surface vessels and submarine drones in the Strait of Hormuz utilizes sonar technology for mine-clearing operations, significantly reducing personnel risk while enhancing operational efficiency, highlighting the importance of unmanned technology in naval warfare.
- Threat Scale Assessment: U.S. intelligence officials indicate that the number of mines Iran has laid in the strait may be relatively modest, potentially only a few dozen, covertly deployed from small fishing and cargo vessels at night, which, despite their limited number, poses a significant threat to commercial shipping and impacts the overall perception of safety in the waterway.
- Shipping Recovery Challenges: Even if mines are cleared, the process of restoring normal shipping volumes is expected to be slow, with estimates suggesting it could take weeks or months to address the backlog of over a thousand stranded vessels, illustrating the immense pressure on the U.S. Navy operating with limited resources.
- Strategic Value: Progress in mine clearance carries diplomatic significance beyond military tasks, as it could exert pressure on Iran to seek a negotiated resolution, reflecting U.S. strategic intentions and influence in the region.
See More
