Now, let us dive deep into the fundamentals of three Air/Defense Services stocks that are poised to thrive in the midst of increased global military spending.
Stock #3: RTX Corporation (RTX)
RTX is an aerospace and defense company that provides systems and services for the commercial, military, and government customers. It offers aerospace and defense products, cabin interior systems, aircraft engines, and more. The company has three segments: Collins Aerospace; Pratt & Whitney; and Raytheon.
On January 29, 2025, RTX’s Collins Aerospace segment secured a follow-on contract of $904 million to develop the U.S. Navy’s Cooperative Engagement Capability.
Under this five-year-long contract, the company will add new capabilities to the system, including increased interoperability, expanded weapon and sensor coordination, and integration of new data sources. This could enhance the company’s market position.
On January 16, 2025, RTX’s Raytheon segment secured a $529 million contract. Under this contract, the company will supply the Netherlands with a Patriot® air and missile defense system fire unit and related equipment to advance the Netherlands’ air and missile defense capabilities.
This contract could place the company in a leading position in the defense market in Europe.
For the fiscal 2024 fourth quarter that ended December 31, RTX’s net sales increased 8.5% year-over-year to $21.62 million. Its adjusted operating profit rose 25.6% from the year-ago value to $2.85 billion.
Moreover, adjusted net income attributable to common shareowners and adjusted EPS grew 18.1% and 19.4% from the prior year’s quarter to $2.07 billion and $1.54, respectively.
Street expects RTX’s revenue and EPS for the fiscal 2025 first quarter ending in March to increase 2.8% and 2.1% year-over-year to $19.85 billion and $1.37, respectively. Plus, the company has surpassed the consensus revenue and EPS estimates in each of the four trailing quarters, which is impressive.
RTX’s POWR Ratings reflect its sound fundamentals. The stock has an overall rating of B, translating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
RTX has an A grade for Momentum and a B for Sentiment and Stability. Within the Air/Defense Services industry, RTX is ranked #21 out of 72 stocks.
To access RTX’s Growth, Value, and Quality ratings, click here.
Stock #2: Textron Inc. (TXT)
TXT operates in aircraft, defense, industrial, and finance businesses. It offers military trainers, defense aircraft, military and commercial helicopters, unmanned aircraft systems, and blow-molded solutions. The company has six segments: Textron Aviation; Bell; Textron Systems; Industrial; Textron eAviation; and Finance.
On February 4, 2025, Ransomes Jacobsen Ltd., a TXT company, unveiled its new Jacobsen® Eclipse 2 ELiTE walking mower, combining the company’s signature quality of cut with a fully electric, lithium-powered drivetrain that actively helps in reducing noise and maintenance and eliminating greenhouse emissions.
Coming with a programmable frequency-of-clip system, zero-maintenance batteries, and advanced onboard diagnostics, the new release could attract more customers, enhancing the company’s sales figures and strengthening its cash flows.
On February 03, 2025, TXT announced the first delivery of its twin-engine, large-utility turboprop, the Cessna SkyCourier, to Air Bravo Corporation, a Canadian passenger, cargo, and air ambulance flight service company.
Combined with a suite for passenger, cargo, and air ambulance capabilities, the new aircraft expands the company’s reach into the Canadian aircraft markets, opening up doors for future sales.
For the fiscal 2024 fourth quarter that ended December 28, TXT’s total revenues came in at $3.61 billion. Its segment profit was reported to be $283 million. Additionally, adjusted income and adjusted income per share from continuing operations amounted to $248 million and $1.34, respectively.
The consensus revenue and EPS estimates of $14.68 billion and $6.11 for the fiscal year ending December 2025 reflect a year-over-year rise of 7.1% and 11.6%, respectively.
TXT’s POWR Ratings reflect its robust prospects. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
TXT has an A grade for Momentum and Value. Within the Air/Defense Services industry, TXT is ranked #13 out of 72 stocks.
In addition to the POWR Rating highlighted above, you can check TXT’s ratings for Quality, Stability, Sentiment, and Growth here.
Stock #1: General Dynamics Corporation (GD)
GD is an aerospace and defense company. It provides business jets, aircraft maintenance and repair, nuclear-powered submarines, land combat solutions, information technology solutions, and more. The company functions through four segments: Aerospace; Marine Systems; Combat Systems; and Technologies.
On December 20, 2024, GD’s business unit, GD’s business unit, General Dynamics Information Technology secured a new $5.6 billion contract with the Air Force Mission Partner Capabilities Office.
Under this five-year-long contract, the company will aid in the process of modernizing and integrating the Department of Defense’s Mission Partner Environments. This move is expected to serve as a blueprint for future efforts across the Department of Defense.
For the fiscal 2024 fourth quarter that ended December 31, 2024, GD’s revenue increased 14.3% year-over-year to $13.34 billion. Its operating earnings rose 10.5% from the year-ago value to $1.42 billion.
Additionally, the company’s net earnings and EPS grew 14.2% and 14% from the prior year’s quarter to $1.15 billion and $4.15, respectively.
Analysts expect GD’s revenue and EPS for the fiscal 2025 first quarter ending in March to increase 10.7% and 19.5% year-over-year to $11.88 billion and $3.44, respectively. Moreover, the company has surpassed the consensus revenue estimates in three of the four trailing quarters.
GD’s stable fundamentals are mirrored in its POWR Ratings. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
GD has an A grade for Momentum and a B for Value. Within the same industry, GD is ranked #7 out of 72 stocks.
Click here to access GD’s Quality, Stability, Sentiment, and Growth ratings.
