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.
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.
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.
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.
"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.
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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[BRIEFING.COM] The stock market finished an upbeat week on a mixed note. The S&P 500 added just over a point, holding its weekly gain at 1.0% while the Nasdaq lost 0.4%.
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