Raytheon Technologies (RTX) shares are extending gains on Aug. 17 after the NYSE-listed firm secured a fresh $22.9 billion contract from the U.S. The landmark seven-year deal aims to accelerate the production of Tomahawk cruise missiles, scaling the annual output to over 1,000 missiles to meet rising global demand. Following today's rally, RTX stock is trading about 20% above the price at which it started 2026.
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Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. The megadeal marks a major operational shift, scaling Tomahawk manufacturing from fewer than 100 units annually to over 1,000 per year across both Land Attack and Maritime Strike variants. Formally awarded under the Pentagon's Arsenal of Freedom initiative, the new contract provides unprecedented multi-year visibility into RTX's defense backlog.
Having already delivered three times more Tomahawk missiles in the first half of 2026 than in the same period last year, RTX's substantial capital investments in its Tucson and Huntsville facilities are converting global rearmament needs into long-term cash flows. A 1.3% dividend yield on RTX shares makes them even more attractive as a long-term holding for income-focused investors. RTX stock remains a compelling buy due to the strong dual engines of Pratt & Whitney and Collins Aerospace.
Commercial air travel continues to expand in 2026, generating high-margin aftermarket services and replacement part demand, with Pratt & Whitney operating profit coming in up 50% year-over-year for fiscal Q2. Meanwhile, concurrent defense tailwinds across other core programs, such as higher production rates for AMRAAM and SM-6 missiles, helped accelerate the overall net income by 29% in the second quarter. All in all, backed by a fast-growing backlog and robust free cash flow, RTX offers an optimal mix of defensive resilience and commercial growth, positioning it well to sustain momentum over the long term.
Investors could also take heart in the fact that Wall Street analysts remain positive on RTX shares for the remainder of 2026. The consensus rating on Raytheon Technologies sits at "Moderate Buy," with price targets as high as $265 indicating potential upside of about 18% from here. On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article.
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