RTX Corporation’s (NYSE:RTX) Missiles & Defense unit has successfully secured a modification contract related to radar systems. The Naval Sea Systems Command in Washington, D.C., awarded this contract.

Key Contract Details

The contract is valued at $225.3 million and is anticipated to be finalized by November 2024. RTX’s responsibilities under the contract include providing integration and production support for Air and Missile Defense Radar and Enterprise Air Surveillance Radar.

The majority of the work associated with this contract will be carried out in Marlborough, MA.

Role of Radars & RTX

Given the recent global escalation of geopolitical tensions, nations worldwide, both developed and developing, are significantly enhancing their defense capabilities. Radars play a crucial role in defense equipment, serving various purposes such as ground surveillance, missile control, air traffic control, fire control, moving target indication, weapons location, and vehicle search.

The demand for military radar systems has witnessed substantial growth due to increased defense spending in emerging economies, rising regional tensions, and conflicts between countries, leading to heightened threats from missiles and aircraft. This trend has positively impacted radar manufacturers like RTX, as evidenced by recent contract wins.

RTX’s product portfolio includes diverse radars such as integrated air and missile defense radars, ballistic missile radars, surveillance radars, and air dominance radars. Combat-proven products like AN-SPY 6, AN-TPY-2, APG-79, and APG-82 are among the company’s offerings that enjoy strong demand in the global military radar market.

Growth Prospects

Recent events, such as Russia’s invasion of Ukraine and ongoing conflicts in the Middle East, suggest that nations worldwide are likely strengthening their surveillance systems to prevent unforeseen attacks. Consequently, the demand for effective radar systems featuring next-generation technology-based warfare capabilities is expected to rise. Fortune Business Insights projects the global military radar market to reach $22.1 billion by 2028, with a CAGR of 6.3% from 2021. This growth forecast bodes well for RTX and other leading radar manufacturers like Northrop Grumman, Lockheed Martin, and L3Harris Technologies.

Competitor Overview

Northrop Grumman offers radar solutions that provide comprehensive surveillance for air and missile defense and air traffic control. The company’s diverse product portfolio includes radars like the F-35 fire control radar, Distributed Aperture System, LONGBOW Fire Control Radar, Scalable Agile Beam Radar, APR-39 DV(2), and EV(2) Radar Warning Receiver programs.

Lockheed Martin’s radars are designed with a high degree of commonality and fully integrated systems, capable of operating in all environments. The portfolio includes AN/APY-9 radar, IRST21 Sensos system, AN/TPQ-53 radar systems, SPY-7, long-range discrimination radar, and more.

L3Harris manufactures combat-proven radars like SPS-48, land-based surveillance radars, AN/APY-11 Multimode radar, Tactical Air Surveillance radar, AN/SPS-48G Long-range 3D surveillance radar, and others.

Price Performance

Over the past year, RTX’s shares have experienced a 19.3% decline, compared to the industry’s 14.2% decrease.

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