Raytheon (RTX.US) is an American manufacturer of advanced weapon systems and technologies for the military, aerospace and space industries. The company's contractors also include private companies, which distinguishes it from companies such as Lockheed Martin (LMT.US), which rely exclusively on government contracts.
Defense spending in the US is likely to rise in the coming years due to growing tensions in the Pacific and military action in Europe. At the same time, combat systems produced by Raytheon, such as Javelin hand-held anti-tank guided missiles and drones, performed very well in the war in Ukraine, which allows speculation on an increase in orders from other parts of the world.
While companies such as Lockheed and Boeing stand to gain from an increase in orders for fighter aircraft, Raytheon may also gain from an increase in orders for Patriot air and missile defense systems, which the company is developing with fellow giant Northrop Grumman (NOC.US) as part of Raytheon Missiles&Defense. The companies are researching and delivering HAWC hypersonic systems, in which missiles reach speeds of several thousand km/h and are capable of eliminating threats before they enter the air zone under threat of attack. The company is known as a prime contractor in the US Department of Defense's anti-missile programmes.
In addition, Raytheon is also a strategic supplier to the aerospace procurement business of Pratt&Whittney. The company has so far supplied several thousand engines for, among others, the F-16 Fighting Falcon, F22 Raptor and F-35 Lightning aircraft.
So far, the supply of armaments from government orders in the USA has accounted for around 49% of Raytheon's annual revenues, and foreign sales for almost 38%. In the coming years, investors can expect an increase in orders from outside the US, although the US Army always has priority in these.
In recent years, the Collins Aerospace division, which supplies specialized, advanced products and services for the civil and military aviation sector, has generated the most profits for the company. These include communications and flight control systems, sensors and data processing, suits for astronauts and even systems for making specialty drinks and food. In 2021, this sector of the company reached more than USD 18bn with an operating profit of almost USD 2bn and accounted for almost 30% of the total net profit.
The company has repeatedly partnered with NASA including providing systems for the Perseverance rover on Mars. Additionally, Raytheon's Intelligence & Space division helps maintain control of satellites with command systems that operate on any platform, with a sensor from any manufacturer and in any orbit. This helps optimize satellite performance and increase the benefits of satellites.
Thanks to Raytheon's ongoing contracts with NASA, overseas sales and government procurements, shares have gained since the outbreak of war in Ukraine, although the future of the industry goes beyond the world's tragic military conflicts to include space exploration, new technologies and materials.
At the same time, the company has positive ratings from analysts on Marketbeat.com: 12 'Buy' recommendations and 2 'Hold' recommendations.
It is worth bearing in mind, however, that in the past Wall Street analysts were often wrong, and the ratings contain only estimates of the expected direction of development and are built on its past performance and the future of the sector. Meanwhile, the stock market is characterised by high volatility.
Raytheon (RTX.US) chart, D1 interval. The company's shares have been moving in an upward channel since December 2021, which coincides with Russia escalating military action in Ukraine and exerting pressure on the West. In the face of speculation about military action, the first support can be found at the levels of 38.2 Fibo retracement, around $90 per share according to the Fibonacci Fan. At the same time, it is at these price levels that we can see the double peak formation from the autumn of 2021. The company is in a strong short-term uptrend, in the face of further escalation of tensions, growths may accelerate. Source: xStation5
