RTX Corporation (NYSE: RTX) reached a significant program milestone on August 3, when its Raytheon business completed installation of the first SPY-6(V)4 radar array at a Navy test site on Wallops Island, Virginia.
The installation establishes an integration framework ahead of a planned retrofit on the USS Pinckney (DDG 91), marking the opening phase of a broader naval modernization effort across aging destroyer fleets.
SPY-6 variants are currently active on two commissioned vessels, installed on 11 ships in testing, and targeted for deployment across more than 50 ships over the next decade.
Raytheon has backed that expansion with an $800 million manufacturing investment designed to double production output by 2028, signaling long-term confidence in sustained government demand.
Raytheon also serves as the primary system architect and radar provider for the Patriot missile defense system, generating recurring revenue through U.S. and international military sales, maintenance contracts, and software retrofits.
The financial results supporting this pipeline are substantial, with RTX reporting Q2 revenue growth of 14% year over year to $24.7 billion and EPS climbing 29% from Q2 2025 to $1.57.
Profit margins expanded to 11.4% from 9.9% in the prior-year period, while global missile replenishment demand pushed total company backlog to a record $289 billion in the second quarter.
Management responded to the strong results by raising full-year earnings and free cash flow guidance, reflecting confidence that program momentum can be sustained through the remainder of the year.
The key risk for RTX investors is timing, as testing at Wallops Island is not scheduled to conclude until mid-2028, meaning the SPY-6(V)4 program will not meaningfully contribute to revenue until that backfit sequence is well underway.
A 14% revenue gain and a 29% EPS jump establish a demanding benchmark for future quarters, and any slippage in the multi-year test-and-retrofit schedule would push expected revenue further out without reducing the overall size of the long-term opportunity.
Lockheed Martin Corporation (NYSE: LMT) competes directly with RTX in the defense radar market through its SPY-7, TPY-4, and Sentinel radar families, and the U.S. Department of Defense signed a $3 billion framework agreement with Lockheed Martin on June 30, valid through June 2031.
That deal covers engineering support and production orders for the AN/MPQ-64 Sentinel A4 radar system, which is designed to simultaneously track manned and unmanned aircraft, cruise missiles, and artillery and mortar fire while integrating with the military’s Integrated Battle Command System.
Hedge fund positioning offers a useful read on institutional sentiment, with funds holding RTX rising from 79 to 95 over the most recent two quarters, while Lockheed Martin funds increased from 59 to 83 over the same stretch.
Short interest remains light across both names, sitting at 1.27% of float for RTX and 1.62% for Lockheed Martin, indicating minimal organized skepticism from the bearish side of the market.
The most striking divergence between the two defense giants is in valuation, with RTX trading at 29.94x forward earnings as of August 5, compared to 19.16x for Lockheed Martin, reflecting the premium the market assigns to RTX’s growth profile.
Whether that premium is justified will depend largely on whether the Navy’s testing and backfit schedule holds through mid-2028, the point at which the SPY-6(V)4 program begins converting its long pipeline into recognized revenue.
