Will a US Navy $205 Million Phalanx Contract Reinforce RTX's (RTX) Naval Defense Leadership?

• Raytheon was awarded a US$205 million contract by the U.S. Navy in September 2025 for continued production and upgrades of the Phalanx Close-In Weapon System (CIWS), which defends against anti-ship missiles and other close-in threats on U.S. and allied ships.
• This award underscores the critical role of the Phalanx system, recently credited with intercepting a Houthi missile and saving hundreds of sailors, in modern naval defense.
• We'll explore how this major Navy contract further solidifies RTX's position as a core technology provider for allied maritime security.

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RTX Investment Narrative Recap

For an investor to consider RTX, they need to believe in enduring global defense demand and the company’s centrality as a supplier of advanced military technologies. While the recent US$205 million Navy Phalanx contract adds to backlog and signals sustained military commitment, it is not likely to change near-term catalysts or address the biggest current risk, potential volatility in defense budgets that could shift priorities away from large hardware programs, impacting RTX’s revenue visibility.

The most relevant recent announcement is RTX’s US$536 million contract win in June 2025 to upgrade the SPY-6 radar family for the U.S. Navy, which, like the Phalanx deal, bolsters the company’s role in high-priority naval defense programs. These contract awards reinforce one of RTX’s main short-term catalysts: continued momentum in the order book and growing international defense partnerships fueling medium-term revenue growth.

Yet, in contrast, investors should not overlook the risk that future defense budgets may prioritize emerging technologies and software over traditional hardware like Phalanx…

Read the full narrative on RTX (it's free!)

RTX's outlook suggests revenues of $97.7 billion and earnings of $8.9 billion by 2028. This is based on an expected annual revenue growth rate of 5.3% and a $2.8 billion increase in earnings from the current $6.1 billion level.

Uncover how RTX's forecasts yield a $163.84 fair value, a 6% upside to its current price.

Exploring Other Perspectives

Eight members of the Simply Wall St Community estimate RTX’s fair value between US$117.66 and US$163.84 per share, highlighting broad differences in opinion. With recent defense contract wins expanding backlog, you may want to compare this optimism to ongoing risks around government spending priorities.

Explore 8 other fair value estimates on RTX - why the stock might be worth as much as 6% more than the current price!

Build Your Own RTX Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your RTX research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
• Our free RTX research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate RTX's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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