RTX - Satellites and Javelins


We all know everyone’s favorite stock Lockheed Martin, but have you heard of our lord and savior Raytheon Technologies (RTX)?

What they do:

The defense sector saw a steep rise at the beginning of the Ukraine invasion, and as one of the largest defense manufacturers (drones, javelin, etc) we saw RTX rise with them. However I want to highlight some of their other areas of production. In addition to defense systems, Raytheon they also have a hand in critical weather and earth observation instruments, and developing ground control systems for satellite control (they installed the one in Baltimore for James Webb as well, which is an adapted version of what they use for satellites). The latter is really cool because satellites aside, their software is taking code generated from observations made by the James Webb and generating images that we can see, in addition to being able to maintain the safety and health of the telescope and allowing control of it. They must also out of necessity have a hand in cybersecurity solutions, which they state is a part of the design from the ground up for all of their products (think not only of defense systems, but protecting the data of any satellite).

Why I’m bullish:

Internet, cellular service, climate observation, data collection… its apparent that the satellite industry has large growth potential (especially as we develop smaller satellites like cubesats) in both potential applications and the ability to put more into orbit. If you want uninterrupted satellite internet/phone service, you need thousands of satellites communicating with each other and communicating with ground stations. Raytheon has an entire business dedicating to launching satellites, building the communication systems for them, and developing sensors to steer the satellites if needed and to determine where they are (as the latter requires a fuel, they are also researching solar means of steering control and ways to refuel the satellite in orbit which has applications outside of satellites). Other things that need satellite communication such as gps navigation and timing and global climate monitoring require these same systems to manage that data. All of these things which need to be protected as well. The opportunities here are vast.

Price action:

The caveat to entering any play here is the macro environment of the market. We are currently sitting at pre-Ukraine ramp up price of ~$85/shr. As you can see from the recent price action in September, RTX traded in a channel between $90 and $95 until the recent SPY dump which brought it down to its current level. If this trend continues and pushes us below this support at $85, I’m eyeing $80 as the next support (which could lend itself to a short put (in time length lol Swole) position). As a large part of the commercial aerospace industry, anything in this sector could also potentially affect RTX’s price which is something to keep in mind. The current average PT for RTX is 110-112, which is 31% upside. Once we get some indication of a market reversal (or another bear rally) however I plan to look into longer dated calls around this price target and potential share accumulation.

Making this DD better:

I started this mostly to get conversation flowing about the ticker, so we could use:

  • a look at the companies financials (we can see on Sept 13th we had a large drop which could have been partially due to expected cash flow in 2022 being reduced from $6bil to $4bil, however SPY also dropped this day)
  • input from anyone in commercial aerospace, aerospace engineering, anything and everything satellites regarding Raytheon’s role/potential and general info on the future of satellites
  • new details from Ukraine/Russia as they come out that may affect Raytheon (we of course can’t ignore their biggest role)

Tank you for coming to my DD uwu :smiling_face:


With Putin escalating tensions between Ukraine this past week I feel an update is warranted.

As much as I like the non-defense focuses of Raytheon, the fact is they are primarily defense oriented, so that is front and center in terms of price action.

We saw a nice bump in the sector yesterday with Putin’s speech. Yet today as LMT consistently trended upwards in the face of SPY, RTX was red nearly the whole day and actually started performing worse than SPY into EOD. This is obviously not ideal, especially as I was looking to hedge downward movements of SPY with RTX.

As of now, if you want to play the sector LMT looks like the better bet. However, I do believe on green days RTX will see a good bump (I also dont have enough data yet to say if RTX will consistently track SPY like it did today), and if im confident in anything its that the great Russian escalator will keep taking things to the next level like your favorite mall installation.

For transparency, I am currently in 2 RTX 10/21 90c (one of which was purchased before SPY drilled 10 dollars) @ 1.11. However if I was going to enter now, I would probably do the 85c of the same exp as it would be safer.

Tldr; I expect good bumps on green days, but as of now LMT is performing better for a defense bet.

1 Like

I should add RTX has an upside of 31% with their median PT of 110, vs LMT with a 9.5% upside on median PT of 460.

However if RTX gets consistently outpaced by LMT it wont really matter in terms of whats a better short term play. With that said, I still like RTX for long term.

So this is a bullish development:


Lets see if it moves the stock tomorrow.

Cutting this RTX position as I dont want to be at the mercy of a SPY downturn, although it could turn profitable

This topic was automatically closed 14 days after the last reply. New replies are no longer allowed.