The U.S.-Australia Javelin Missiles Deal: Strategic Defense Ties and Investment Opportunities in Defense Contractors

The U.S.-Australia Javelin Missiles Deal, valued at $97.3 million, underscores a pivotal shift in global defense dynamics. By approving 161 Lightweight Command Launch Units (LwCLUs), along with training systems and technical support, the U.S. is not only bolstering Australia's anti-armor capabilities but also reinforcing its strategic footprint in the Indo-Pacific. This deal, facilitated by the Javelin Joint Venture (JJV)—a partnership between Raytheon Technologies Corporation (RTX) and Lockheed Martin (LMT)—highlights the growing importance of defense exports in shaping both national security and corporate profitability. For investors, the question is clear: Which of these two industry giants is better positioned to capitalize on the surge in defense spending and regional security demands?

Strategic Implications of the Javelin Deal

The Javelin system, a “fire-and-forget” anti-armor missile, has proven its combat effectiveness in conflicts ranging from Ukraine to Afghanistan. Its adoption by Australia aligns with U.S. efforts to counter China's military expansion and ensure regional stability. The deal's inclusion of 161 LwCLUs and associated logistics support ensures Australia can maintain a modern, sustainable defense posture. For RTX and LMT, the contract is part of a broader trend: defense exports now account for a significant share of their revenue streams. In 2025 alone, RTX secured $25 billion in defense orders, while LMT's international contracts, including the $1.3 billion Javelin production deal, reflect their entrenched roles in global security.

RTX vs. LMT: Financial Resilience and Growth Prospects

Raytheon Technologies has emerged as a standout performer in 2025, driven by a diversified revenue model and robust backlog. With a record $221 billion in backlog—$90 billion in defense and $131 billion in commercial—RTX's book-to-bill ratio of 1.8 signals strong demand. Its recent $3.5 billion AMRAAM contract, the largest in the program's history, further cements its dominance in air-to-air missile systems. Analysts project a 9% upside for RTX, with a median price target of $167.50, reflecting confidence in its profitability and innovation pipeline.

Lockheed Martin, while still a titan in defense, faces headwinds. Its Q2 2025 results revealed $1.6 billion in program losses, primarily from a classified aeronautics initiative and international helicopter contracts. Despite a $73.7–74.7 billion revenue forecast for 2025, LMT's reliance on U.S. government contracts (75% of 2024 revenue) makes it vulnerable to budget fluctuations. The company's recent $4.3 billion JASSM/LRASM contract with the U.S. Air Force is a bright spot, but its operating margin of 4.2% lags behind RTX's 9.7%. Analysts remain cautious, with a consensus price target of $605.36 implying a 15.7% upside, though this pales in comparison to RTX's optimism.

The Role of U.S. Defense Spending and Geopolitical Tensions

The 2025 U.S. defense budget, with its $1 trillion projection for 2026, has created a tailwind for defense contractors. Both RTX and LMT are beneficiaries, but their strategies differ. RTX's strength lies in its commercial and defense diversification, including its $250 million ESSM Block 2 contract with Japan. LMT, meanwhile, is doubling down on hypersonic systems and space resilience, as seen in its $1.5 billion Conventional Prompt Strike (CPS) contract. However, LMT's exposure to program overruns and geopolitical risks—such as the $500 million tariff headwind in 2025—poses challenges.

Long-Term Investment Considerations

For long-term investors, the key differentiator is resilience. RTX's higher operating margin, diversified revenue streams, and strong backlog position it as a safer bet in an era of unpredictable defense budgets. Its recent $946 million Patriot system contract with Romania and $590 million Next-Generation Jammer deal with the Navy further underscore its ability to secure recurring revenue. LMT, while still a dominant force, must navigate program risks and a more volatile earnings profile.

The Javelin deal itself is a microcosm of this dynamic. RTX and LMT's joint venture has produced over 50,000 Javelin missiles since the program's inception, but RTX's recent profitability and contract wins suggest it is better positioned to scale in a high-demand environment.

Conclusion: A Call to Action for Investors

The U.S.-Australia Javelin Missiles Deal is more than a transaction—it is a strategic investment in global stability and a testament to the enduring value of defense exports. For investors, the choice between RTX and LMT hinges on risk tolerance and growth expectations. RTX's financial discipline, innovative edge, and diversified portfolio make it a compelling long-term play, while LMT's focus on cutting-edge systems like hypersonics offers upside for those willing to tolerate volatility. As defense budgets expand and regional tensions persist, both companies will remain critical to national security—but only one is poised to outperform in the years ahead.