RTX Corporation’s RTX business segment, Raytheon, recently secured a deal for engineering and technical services in support of the Evolved Seasparrow Missile (“ESSM”) and NATO Seasparrow Missile Systems programs. The deal has been provided by the Naval Sea Systems Command, Washington, D.C.

Valued at nearly $43 million, the contract is expected to be completed by December 2025. A major portion of the work related to this deal will be carried out in Tucson, AZ. This contract will primarily serve the U.S. government (98%) and provide minor support to the governments of Japan (1%) and South Korea (less than 1%) under the Foreign Military Sales program.

More About RTX’s ESSM Missiles

RTX’s ESSM is a highly versatile naval defense system. Its enhanced capabilities provide superior performance in maritime warfare, offering nations the ability to defend their fleet more effectively. The ESSM program is developed by the U.S. Navy and 12 other allied nations of the NATO Seassparrow Consortium.

With more than 330 live firings at sea, the ESSM weapon is a well-tested ship self-defense missile against a challenging and diverse set of air and surface threats.

Such notable features of the ESSM are likely to have been boosting its demand, which is further evident from the latest contract win.

What’s Favoring RTX Stock?

Rapidly increasing geopolitical tensions worldwide and heightened regional conflicts in different parts of the globe have prompted nations to bolster their defense capabilities. Since missiles constitute a large share of a nation’s defense arsenals, countries are investing heftily in advanced missile systems for deterrence and defense.

The Mordor Intelligence firm predicts the global market for missiles and missile defense systems will witness a CAGR of 5% between 2024 and 2029. This should benefit RTX, which has a handful of combat-proven missiles in its product portfolio, such as the SM-6 missile, Guidance Enhanced Missile, the National Advanced Surface-to-Air Missile System, Tomahawk, Standard Missile 2 and the AIM-9X Sidewinder missiles.

Opportunities for Other Defense Companies

As global threats rise, military contractors that are projected to gain from the growth prospects presented by the missiles and missile defense system market are as follows:

The Boeing Company BA: For almost 25 years, the company has been providing air and missile defense systems to the United States, its allies and international partners. Its offerings include the Avenger Air Defense System, Aegis Ballistic Missile Defense and Ground-Based Midcourse Defense.

Boeing boasts a long-term (three to five years) earnings growth rate of 19.3%. The Zacks Consensus Estimate for BA’s 2025 sales implies growth of 22.5% from the 2024 estimated figure.

Northrop Grumman NOC: The company provides high-speed, long-range strike weapons like the AARGM-ER, which is a supersonic, air-launched tactical missile system. It also develops and manufactures warheads, fuses, advanced high-speed propulsion systems and other missile components.

Northrop has a long-term earnings growth rate of 19.1%. The Zacks Consensus Estimate for NOC’s 2024 sales suggests growth of 5.3% from the prior-year reported figure.

Lockheed Martin LMT: The company’s Missiles and Fire Control business unit develops, manufactures and supports advanced missiles and rockets. Some of its renowned products are the PAC-3 family of missiles, M270, RRPR and THAAD.

Lockheed has a long-term earnings growth rate of 4.6%. The Zacks Consensus Estimate for LMT’s 2024 sales indicates growth of 5.5% from the prior-year reported figure.