Raytheon News
Raytheon enjoys a unique position in the aerospace and defense industry that allows it thrive even when the economy isn't doing well. It is shielded from the general economic cycle due to its large share in the commercial aero business and because US Defense priorities depend upon it being able perform grueling, high touch R&D at the speed that's necessary for success in a world where there are great power rivalries.
The defense industry has an unbeatable opportunity to benefit from a trend that could transform how nations defend against great-power conflict. It is also likely to have the potential to change US military priorities, as well as the commercial aerospace market. Raytheon's competitive moat makes it a good company to consider in times when markets are turbulent.
The President Biden's visit to Ukraine could boost stock prices
The White House authorized the deployment of the Patriot missile systems to Kyiv, Ukraine. This was before Russia's brazen invasion last month. Although the battle in Ukraine was symbolic, future Raytheon clients will see a strong indicator that Raytheon's products are capable of protecting their countries against attack.
That could be a good thing for Raytheon in the long run, especially because a successful deployment to Ukraine would mean a significant increase in defense spending by the nation-states that purchase its wares.
This could drive a rise in RTX stock values as nation states look to update their arsenals. This type of battlefield effectiveness is crucial in a world that nations seek to retool its armed forces and refocus on non-confrontational diplomacy and policing, as opposed to the type of combat that was fought over centuries by warring superpowers.
The emergence of drones, a new threat to missile and air defense capabilities, is another transformational shift. Drones are small and highly maneuverable. They are difficult to detect with traditional air and missile defense systems as well as ground sensors.
Raytheon developed drone defense radars that can track these elusive and stealthy weapons of war. The V3 radar developed by Raytheon is part of Navy's Ford-class aircraft carrier. It will be activated later this summer.
It is also working on V2 & V3 versions its SPY-6 radio, which will be installed onto future destroyers. Lockheed Martin manages the integration of the SPY-6's four radar face with IAMD (Integrated Air and Missile Defense) systems on ships.
This makes it one the most advanced and complex radars that the military has ever seen and is a crucial element of its overall effectiveness. Mills stated that Raytheon continues to work on plans to install this system on all carriers built by HII over the next five-years, despite the difficulties.