The consolidation of Raytheon’s defense business came at a favorable moment

Some investors’ fears about the merger of United Technologies with Raytheon Technologies Corporation (RTX) have dissipated amid increasing demand for missile weapons. The union of United Technologies with Raytheon in a $100 billion deal began in 2019, but then many experts doubted the commercial effectiveness of the giant. Now it is evident that for United Technologies, the Raytheon division will become one of the main drivers as a manufacturer of guided missile weapons. 

At the same time, the aviation segment of United Technologies, primarily the production of Pratt & Whitney engines, is still under pressure from the COVID-19 crisis, which caused the increase in aviation fuel prices. In 2022, Raytheon overtakes the SPADE defense index (DXS), exceeded profit expectations in the first quarter, and already has an order book (backlog) of more than $150 billion. Against the background of growing demand, Raytheon’s main task now is to increase the volume and reduce the release time of high-tech products. 

Orders for Raytheon products are likely to increase in the next two years. Raytheon will publish a report for the second quarter of 2022 before trading on July 26. The company to confirm optimistic forecasts and report an increase in the order portfolio. The company is already receiving orders from the Pentagon to replenish the arsenals of anti-tank missiles and portable anti-aircraft missile systems. Most likely, the actual growth rates of the global arms market will be greater than the average annual growth rate of about 5% from 2021 to 2026.