Germany seals $3.5B missile deal with RTX to bolster naval defenses
Germany has agreed to purchase advanced missile systems from RTX in a deal worth $3.5 billion. The sale includes 173 SM-6 Block I missiles, up to 577 SM-2 Block IIIC missiles, and multiple launch systems. Analysts expect the transaction to bring RTX an operating profit of around $350 million.
The German government requested the missiles to strengthen its naval defenses. The SM-6 models will protect F127-class frigates operating in the North Sea. Meanwhile, the SM-2 variants are designed to counter anti-ship missiles and incoming aircraft.
RTX’s Raytheon division, which secured the contract, reported $26.7 billion in revenue and $2.6 billion in operating profit last year. This sale is particularly lucrative, as Germany is paying nearly twice the price a U.S. buyer would. The company has already sold 12,000 SM-2 missiles worldwide, making this one of its largest single orders.
Congress has never blocked a sale notified by the Defense Security Cooperation Agency, so approval is likely. RTX’s stock currently trades at 35 times earnings, with a 1.6% dividend yield and projected annual earnings growth of 10% over the next five years.
The deal follows strong financial performance in other RTX divisions. Its gaming segment, known for Nvidia’s GeForce RTX graphics cards, saw a 30% revenue jump to $4.3 billion in Q3 2025/26, driven by high demand for the RTX 5000 series.
The sale will boost RTX’s earnings by approximately $0.26 per share. Germany’s investment reflects its commitment to modernizing naval defenses. With no congressional opposition expected, the deal is set to proceed smoothly.
