CNBC's Jim Cramer on Wednesday told investors he thinks Wall Street is not paying close enough attention to RTX, an aerospace and defense company.
RTX is a re-branded version of the original Raytheon Technologies with a robust aerospace sector thanks to a merger with United Technologies. Although its stock hasn't been popular this week — in fact, it tumbled more than 2% due to a strike at a different aerospace company — Cramer thinks RTX is a strong player at the forefront of two sectors poised to make a lot of money in the coming years.
"I think you're getting another chance to buy RTX into unjustified weakness here," Cramer said. "Because, if anything, I feel much more confident about their long-term prospects in both aerospace and defense — two businesses where they seem set for many, many years of gigantic orders."
According to Cramer, the typical aerospace bull market cycle lasts around seven years, and he thinks the demand for air travel is only increasing, in part due to the consumer's need to travel post-Covid. RTX CEO Greg Hayes discussed the growing market for commercial aircraft with CNBC's Phil LeBeau at the Paris Air Show on Tuesday.
"We're back to pre-pandemic levels domestically for air traffic, we're almost back there internationally," Hayes said. "And we still see four-and-a-half, five percent annual growth at least for the next decade."
Hayes continued, saying that because of the war, RTX is already receiving multi-billion dollar restock orders.
"We're going through those munitions at a rate that none of us expected. It will take us years to restock the U.S. and our NATO allies individually," Hayes said, adding that RTX has already seen about $2 billion worth of orders related to Ukraine, and he expects another $3 billion this year alone. "But there is probably a multiple of that we'll see over the next three or four years. But it's not a this year/next year. It literally will be for the next decade."
Many were worried that the debt ceiling deal would mean cuts to the government's defense budget, but that fear never came to fruition. With the war between Ukraine and Russia continuing to drag on, Cramer concurred with Hayes and said RTX is "locking in major business for years to come."
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