RTX Secures Pentagon Deal to Triple SM-3IB Output, Boosting $7-8B Raytheon Revenue
Wolfe Research reaffirmed an Outperform rating and $235 price target for RTX after a Pentagon framework deal could triple SM-3IB missile production. RTX’s Raytheon unit may gain $7–8 billion (25% growth over 2025) and boost its 6% CAGR; Airbus’s 2026 plan for 870 jets should raise engine orders.
1. Pentagon Framework Deal for SM-3IB Production
RTX sealed a framework agreement with the Pentagon to expand SM-3IB missile manufacturing. Wolfe Research reaffirmed an Outperform rating and $235 price target, forecasting Raytheon could see $7–8 billion in additional revenue (25% above the 2025 run rate) and a boost to its 6% CAGR.
2. Airbus Jet Output Raises Engine Demand
Airbus plans to increase jet production to 870 units in 2026 from just under 800 in 2025, intensifying demand for engines supplied by RTX’s engine division. This ramp-up could drive meaningful growth in RTX’s commercial propulsion revenue.