This Is Why Raytheon’s Earnings Are Exploding

RTX Corp. (NYSE: RTX) is one of the best stock picks I’ve made in the past year. It’s up more than 70% in that time. And it’s likely to move even higher in the year ahead.

Why? Because it fills one of the most important, functional roles in America’s defense by supplying the missiles our country needs to defend itself.

When I talk about Raytheon, I always tell investors that it makes every missile you can name — the Tomahawk, the Stinger, the Sidewinder, the Javelin (which it co-manufactures with Lockheed Martin), and, of course, the Patriot.

If you’re not familiar, the Patriot missile system is one of the most trusted, effective, and frequently deployed anti-air defense systems in the world. It intercepts all manner of airbound threats, including surface-to-surface and air-to-surface missiles, as well as rockets and mortars. It’s deployed in 19 countries around the world.

Raytheon also partners with Rafael on Israel’s Iron Dome. In fact, RTX and Rafael recently announced plans for a new $33 million production facility in Arkansas that will produce Tamir and SkyHunter missiles to counter ongoing threats from adversaries in the Mideast.

No doubt, Raytheon has been extremely busy these days supplying both Ukraine and Israel, as well as the U.S. Defense Department, with ammunition and weapons platforms.

Most recently, Raytheon won a $736 million contract to manufacture the improved Block II variant of its AIM-9X Sidewinder missiles for the Air Force.

The AIM-9X is a sophisticated short-range air-to-air and surface-to-air missile carried by F-15C Eagle, F-15E Strike Eagle, F-16 Fighting Falcon, F/A-18 Super Hornet, E/A-18G Growler, F-22 Raptor and all F-35 Joint Strike Fighter variants. It’s also deployed by more than 30 American allies.

RTX also won a $525.5 million contract to supply the Navy with Evolved Seasparrow air defense guided missiles and a $255 million deal for the production and maintenance of standard missiles (SM-3s) in just the past week.

Furthermore, earlier this month, the company won a massive, $1.3 billion contract award to co-produce more Javelin anti-tank munitions with Lockheed Martin.

The Javelin has been a hot commodity ever since it thwarted Russia’s attempted conquest of Ukraine by eviscerating whole tank columns. And since so many missiles have been expended in the past few years — with wars running hot in both Eastern Europe and the Middle East — Raytheon has been scrambling to meet demand and backfill U.S. stockpiles.

Make no mistake, the war cycle we’re in has generated a huge demand for munitions. And that trend is set to continue as demand for missiles and missile defense systems is expected to grow 5% annually from now until at least 2029.

Obviously, it’s not just missiles, either. The United States is poised to spend a record $895 billion on defense in the next year, with a military budget that is almost certain to top $1 trillion in the next presidential administration — regardless of who wins the upcoming election.

Meanwhile, global defense spending totaled $2.44 trillion in 2023 — up from $2.2 trillion in 2022. And that figure is on track to be even higher this year and still higher in 2025.

So if you’re looking to cash in on defense, RTX (Raytheon) stock is a good way to do it. Of course, if you really want to profit from the defense sector, you should check out my latest report detailing the boom in AI-driven warfare.

You can find that here.