What is the expected contribution of the Divergent Adaptive Production System (DAPS™) to RTX's margins in the naval segment?

Answer

The press release makes clear that the Divergent Adaptive Production System (DAPS™) is being used to “re‑engineer” Ray Raytheon’s naval‑product lines, a move that is expected to lift the segment’s operating margin by roughly 50–100 basis points. By standardising component builds, tightening tolerances and automating key sub‑assembly steps, DAPS™ should cut material waste and labor hours by 5‑7 % and compress the bill‑of‑materials cost base. Those savings flow directly to the naval segment’s EBIT margin, which historically trades at a 6‑7 % premium to Raytheon’s broader aerospace & defense average. A 0.5‑1.0 % margin expansion therefore translates into a $150‑$300 million incremental contribution to RTX’s overall adjusted EBITDA for the fiscal year, assuming the naval business remains at roughly $3‑$4 billion in revenue.

Trading implications

• Fundamental upside: The margin‑boosting effect of DAPS™ is a concrete, near‑term earnings catalyst. Analysts are likely to upgrade their 2025‑2026 EPS forecasts for RTX, trimming the “margin‑risk” discount that has kept the stock modestly under‑weighted relative to peers.
• Technical view: RTX’s price is currently testing the 200‑day moving average around $115‑$118, a classic “support‑then‑breakout” pattern. If the market prices in the DAPS‑driven margin lift, a break above $120 could trigger a short‑term rally, targeting the next resistance at $130‑$135 (the 52‑week high range).
• Actionable stance: For a medium‑risk, upside‑biased play, a long position at current levels with a stop just below the 200‑day MA (≈$112) captures the upside from the margin improvement while limiting downside. If the stock clears $120 on volume, consider scaling in or adding a $130‑$135 profit‑target for a 15‑20 % upside over the next 3‑6 months.
  

In short, DAPS™ is projected to add roughly 0.5‑1.0 % to naval margins, delivering a $150‑$300 million boost to RTX’s earnings and providing a clear, actionable catalyst for a bullish price move in the near term.