Raytheon Technologies Gets $2B U.S. Air Force Contract

The U.S. Air Force has awarded a missile system contract worth about $2 billion to Raytheon Technologies (RTX). The contract specifically goes to the Raytheon unit called Raytheon Missiles and Defense, which serves customers in more than 50 countries around the world. The contract involves engineering, developing, and manufacturing the Long-Range Standoff Weapon (LRSO).

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The Air Force plans to replace its aging Air-Launched Cruise Missile with the LRSO, which it calls a strategic weapon. The old missile system that the LRSO will replace was fielded in the 1980s and had a 10-year design life. According to the agency, the aging system will continue to struggle with operational challenges until replaced.

“The LRSO team has strived for nearly three years to ensure the Air Force achieved a stable cruise missile design meeting the nation’s requirement for a credible air-delivered nuclear deterrent for many years to come,” said LRSO Program Manager Elizabeth T. Thorn.

Raytheon will build the LRSO in Tucson, Arizona. It is expected to be completed in February 2027. (See Raytheon stock chart on TipRanks).

In June, Jefferies analyst Sheila Kahyaoglu reiterated a Buy rating on Raytheon stock and raised the price target to $105 from $95. Kahyaoglu’s new price target suggests 21.78% upside potential.

The analyst maintained her bullish view after hosting investor meetings with Raytheon CEO Greg Hayes and CFO Neil Mitchill. Kahyaoglu noted that the executives referred to themselves as activist investors in their own stock.

Consensus among analysts is a Strong Buy based on 11 Buys and 2 Holds. The average Raytheon price target of $95.17 implies 10.38% upside potential to current levels.

RTX scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.