Raytheon shares hit record highs on Syria war talk

The producer of the Tomahawk cruise missile is expected to benefit from any US conflict against Damascus.

By Bruce Kennedy Aug 30, 2013 4:41PM

U.S. Navy guided-missile destroyer USS Barry (DDG 52) launches a Tomahawk cruise missile in support of Operation Odyssey Dawn March 29, 2011 from the Mediterranean (© U.S. Navy via Getty Images)It's been a dramatic six months for Raytheon (RTN). Earlier this year, shares of the defense giant were at a 52-week low, pressured by the federal sequestration's effect on the U.S. defense budget, according to The Boston Business Journal.

But this week, with talk of a U.S. assault on Syria, Raytheon's stock is up 50% to an all-time high. Shares closed Friday at $75.41.

Raytheon produces Tomahawk cruise missiles -- Washington's opening-volley weapon of choice in many recent conflicts and what analysts believe will be among the first shots fired if the U.S. intervenes in Syria.

A possible attack on Syria would likely signal new Pentagon orders of Tomahawks. Politico reports that the Pentagon purchases 196 Tomahawks annually -- which is considered the "minimum sustaining rate" to maintain the weapon's supply chain. But the website also notes production of the missiles had to increased after hundreds of them were used during the 2011 air war against Libya.

If you account for those extra orders, notes Politico, "Raytheon has delivered 252 missiles this fiscal year and 361 last fiscal year." If and when a conflict with Syria does break out, there will certainly be more demand for the Tomahawks -- which a Navy official recently told moneyNOW cost about $1.2 million each.

"There’s a number that has to be available," an unnamed defense lobbyist told Politico. "If they fall below that number, they’ll replace them."

Raytheon would be only one of several defense companies to benefit from a war with Syria.

"For strike scenarios which rely primarily on bombs and missiles, we believe that Lockheed Martin (LMT) and Raytheon would see the greatest benefit given the likely use of Hellfires, Paveways, and Tomahawks," William Loomis and Benjamin Owens, analysts at Stifel Nicolaus, told blogger Ben Levisohn at Barron's.

And the two note that, in the unlikely event of a full U.S. ground invasion of Syria, companies like Northrop Grumman (NOC), L-3 Communications (LLL), AeroVironment (AVAV), and General Dynamics (GD) would be among the U.S. defense sector firms most likely to benefit.

More on moneyNOW

Aug 30, 2013 5:07PM
Wouldn't it be cheaper to drop bales of money?
Aug 30, 2013 4:50PM
Hmmm could one say OBama is in bed with the military war complex?

I mean thats what liberals said about Bush.

So its only fair to say that Obama is in bed with the military industrial complex, and I am sure someone will profit greatly from this which I am sure obama is more than OK with.

Obama is no better than Bush despite what he claims.

Aug 30, 2013 5:08PM
Did everyone forget the LOVIE KISSIE THING BETWEEN Medvedev AND OBAMA ???

Aug 30, 2013 4:57PM
 Just CRUISE MISSILES, and maybe some F-117 strikes? That will really make friends!
When is this country going to learn to mind its own freaking business. You need a scorecard in Syria to keep track of the players!  If you back the” FREEDOM FIGHTERS” are you backing the MUSLIM BROTHERHOOD ? Or any other insurgent faction? IF THEY WANT TO GAS EACH OTHER FINE BY ME.  Did we learn anything from IRAQ ???
 Now with the Russians and Chinese involved,   this can blow up pretty quick.
 Let the Syrians find their own path. If you want to help, send some humanitarian aid.
And to stay on point, I did purchase 100 shares of Raytheon at 77.

Aug 30, 2013 5:03PM
Are the treehumping puzzy libs going to back Obummer the war monger?
Sep 2, 2013 10:02AM
I have stated several times that Obama is at times, Bush2.0, clearly concerning Syria, that's the case. The Jerk even claimed he didn't need to ask Congress, he says he's doing this just to be nice and respectful to Congress? So one fraud asks a group of frauds. Obama ran on one platform concerning war and now just as his opponents, he's flipped the script. And DC wonders why the President and Congress are near or at all time lows approval rates.

Fact is, both parties are in bed with someone, Military or otherwise. Profiting from wars has been a huge part of World History for far too long. It will end when humans no longer exist.

Sep 3, 2013 4:37PM
John McCain is well funded in Raytheon. He probably has stock options via the company for perpetuating war.
Aug 31, 2013 8:42PM

"You either fer us or agin us"  oooops wrong guy...Soooo soon many of you fergit...


I tried to make it so you could read it.

Aug 31, 2013 8:35PM

No the puzzy stinkin' Repubs won't approve anything because, it may drag some of their money from Israel into the fray...

And then if Obama is smart, we won't defend them...

Let them defend themselves...

As our boys and girls head home, back to the good old USA. 

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