Raytheon’s New Intelligence Aircraft Could Change the War Game
Despite the rapid arrival of smaller kinds of surveillance drones and new kinds of unmanned systems, there is still a pressing need for a new generation of innovations supporting advanced fixed-wing intelligence, surveillance and reconnaissance missions.
Finding enemy armored convoys on the backside of a mountain beyond the line of sight, supporting ballistic missile defense operations, tracking enemy targets from the sky with optical, multi-spectral, and radio frequency sensors, and networking time-sensitive combat data across multiple domains in near real-time amid war . . . are all missions United States, UK, and NATO fixed-wing surveillance assets will increasingly be expected to perform.
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While of course still useful for counterinsurgency and counterterrorism operations, this plane can prove even more impactful in a major conflict against a sophisticated adversary.
Many are of the view that stealth rules the day, along with small drones and unmanned systems. But when it comes to aerial surveillance, larger, fixed-wing surveillance platforms, while less stealthy, can still massively impact the speed and operational effectiveness in major power maneuver warfare. This is due to their ability to provide targeting at long stand-off distances and bring “on location” manned, real-time command and control at the point of attack.
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Seoul is often overlooked as a strategically vital and critically positioned ally in need of surveillance assets.
The complex and fast-changing threat landscape in the Pacific region is leading the United States and its allies in the region to vigorously pursue new drones, surveillance technologies and fixed-wing platforms configured for long-range, long-dwell, multi-sensor targeting missions.
While Japan, Australia and Taiwan are all making news for the pace at which they are both developing and acquiring new surveillance platforms such as drones and surveillance planes, the Republic of Korea is often overlooked as a strategically vital and critically positioned ally equally in need of surveillance assets. Being attached to the Korean Peninsula, and therefore directly merged into the Asian continent, the Republic of Korea provides a uniquely positioned opportunity for U.S. and allied deterrence missions in the region.
Raytheon Technologies (NYSE:RTX) look like excellent options for investors. Both are set to substantially increase earnings and free cash flow (FCF) in the coming years. Instead of thinking about them as suffering companies in the beaten-down aerospace industry, there s a case for arguing that they are both embarking on a multi-year growth trajectory that will lead them to substantive FCF generation. The question is: Which will get to $7 billion in FCF first?
CEOs set out their stall
The CEOs of both companies have publicly declared that they will get FCF to at least $7 billion in due course. On GE s recent first-quarter earnings call, CEO Larry Culp reiterated the company s target of a high-single-digit FCF margin by 2023, arguing that if GE got back to revenue of $85 billion to $90 billion in 2023, a high-single-digit margin would get us to a $7 billion free cash number.