Raytheon lands $1.1 billion Navy missile contract

TUCSON, Ariz. - Defense contractor Raytheon, a business segment of RTX (NYSE: RTX), has secured a $1.1 billion contract from the U.S. Navy for the production of AIM-9X Block II missiles, marking the program’s largest production contract to date. Under the terms of the agreement, Raytheon will ramp up production to 2,500 missiles annually. The contract adds to RTX’s robust performance, with the stock showing a 20% year-to-date return and trading near its 52-week high of $138.82.

Barbara Borgonovi, president of Naval Power at Raytheon, highlighted the significance of the contract, stating, "This award represents a historic milestone for the AIM-9X program, further emphasizing its importance to the U.S. and partnered nations." She added that the company is prepared to meet the increased demand through its partnership with the U.S. Navy.

The AIM-9X Block II is a sophisticated infrared-tracking, short-range missile capable of engaging both air and surface targets. Combat-tested across various theaters globally, the missile is designed for easy integration with a broad array of modern aircraft. It also contributes to layered defense strategies, including ground-launched capabilities through systems such as the National Advanced Surface-to-Air Missile System (NASAMS).

The AIM-9X program is a collaborative effort led by the U.S. Navy and involving the U.S. Air Force. It has garnered the attention of over 30 allied and partner nations due to its proven effectiveness and the growing international interest in advanced defense capabilities.

Raytheon, with a century-long history in defense technology, specializes in integrated air and missile defense, smart weapons, advanced sensors, and space-based systems. RTX, the world’s largest aerospace and defense company, employs over 185,000 individuals globally and reported sales exceeding $80 billion in 2024. The company’s headquarters is located in Arlington, Virginia.

This contract award is based on a press release statement from Raytheon.

In other recent news, Raytheon, a business unit of RTX, has secured a $536 million contract from the U.S. Navy to support the SPY-6 family of radars. This contract, which extends the previous Integration and Production Support agreement, includes upgrades for Flight IIA destroyers. In addition, Raytheon received a $1.1 billion contract modification from the U.S. Navy for the production and delivery of AIM-9X missiles, with work expected to be completed by October 2028. The Naval Air Systems Command is overseeing this contract, which includes allocations for the Navy, Air Force, and Foreign Military Sales customers.

Furthermore, Raytheon has delivered the first AN/TPY-2 radar featuring a fully populated Gallium Nitride array to the U.S. Missile Defense Agency, enhancing the nation’s defense against ballistic and hypersonic missile threats. In another development, TD Cowen analysts raised the stock price target for RTX to $155, maintaining a Buy rating, citing potential for margin expansion and a favorable long-term outlook. The analysts also noted that the second quarter’s free cash flow expectations might be overly optimistic due to timing issues.

Additionally, the Golden Dome defense program, announced by President Trump, could involve RTX as a potential participant. The program, which aims to be operational by 2029, focuses on space-based interceptor satellites for missile defense. The initial phase has secured $25 billion in funding, though the Congressional Budget Office estimates the program’s 20-year cost could reach $831 billion. These developments highlight Raytheon’s continued involvement in significant defense projects and its strategic partnerships with the U.S. military.

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