ARLINGTON, Virginia, August 17, 2026, 12:18 EDT — Cash trading is underway in U.S. markets.
- Raytheon secured a seven-year U.S. Navy Tomahawk deal valued at $22.9 billion.
- Production is set to increase from 60 missiles per year to over 1,000.
- The award represents 26.6% of Raytheon’s order backlog in June.
RTX Corporation NYSE:RTX landed a Tomahawk contract valued at $22.9 billion on Monday. The agreement requires its Raytheon division to increase yearly production by about 17-fold.
The face value is substantial, while revenue recognition is slower. Distributed over seven years, the contract comes to an annual average of $3.27 billion, equal to 3.4% of RTX’s midpoint guidance for 2026 sales.
That difference highlights the market’s assessment. RTX’s stock rose by nearly 1% in early trading on Monday, in spite of the headline figure.
| Tomahawk contract measure | Verified figure | Investor reading |
|---|---|---|
| Total value | $22.9 billion | Major boost to backlog |
| Term | Seven years | Revenue recognized over time |
| Simple annual average | $3.27 billion | Roughly 3.4% of RTX’s projected sales |
| Current annual output | 60 missiles | Currently a low production level |
| Target annual output | More than 1,000 | Output goal exceeds current by at least 16.7 times |
The agreement cements a framework established in February. At that time, RTX stated that joint funding would safeguard short-term cash and back investments in capacity. Manufacturing covers Raytheon facilities in Alabama, Massachusetts and Arizona.
Acting Navy Secretary Hung Cao stated, “We called on industry to rapidly scale up munitions output, and RTX is delivering.” The contract comes amid low U.S. stockpiles and robust demand from allies.
| Financial comparison | Amount | Tomahawk value as share |
|---|---|---|
| Raytheon backlog in June | $86.0 billion | 26.6% |
| RTX defense backlog | $119.0 billion | 19.2% |
| Total RTX backlog | $289.0 billion | 7.9% |
| RTX midpoint for 2026 sales guidance | $95.5 billion | 3.4% annualised |
| Raytheon Q2 revenue | $8.27 billion | 9.9% annualised compared with Q2 run-rate |
Raytheon began the award process with solid momentum. Second-quarter revenue climbed 18% to $8.27 billion. Adjusted operating earnings advanced 29% to $1.04 billion, bringing the margin up to 12.6%.
The company’s total backlog climbed to $289 billion, an increase of 22% compared to the same period last year. Chief Executive Chris Calio stated, “Demand remains robust.” RTX updated its adjusted 2026 sales outlook, forecasting $95 billion to $96 billion.
| Analyst | Recommendation | Price target | Latest action |
|---|---|---|---|
| RBC Capital | Outperform | $250 | Increased July 24 |
| Susquehanna | Positive | $245 | Increased July 24 |
| TD Cowen | Buy | $240 | Increased July 27 |
| Wells Fargo | Equal Weight | $230 | Increased July 24 |
| UBS | Neutral | $215 | Increased July 24 |
Wall Street opinion stays optimistic though divided. Latest published price targets are set between $215 and $250, with UBS and Wells Fargo maintaining neutral ratings as others issue bullish recommendations.
Conversion remains the key challenge. In June, Raytheon’s backlog was already larger than ten quarters of sales for the segment. The latest contract increases visibility, but earnings timing will be determined by factory throughput.
Risks: The contract’s total value might not fully convert into actual funded sales. Margins could be pressured by capacity setbacks, shortages among suppliers, rising costs, or a less favorable program mix. Adjustments in government procurement priorities are also possible.
The contract adds support to RTX’s demand outlook but does not resolve concerns about valuation. Investors still require evidence that scaling up production by 17 times will maintain Raytheon’s higher 12.6% margin.
