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Lack of ample contract flows from Pentagon might have restricted U.S. defense stocks from delivering an impressive performance over the last week. Moreover, Boeing’s (BA - Free Report) latest announcement to cut down its production rate as well as delivery target for 787 Dreamliners might have disappointed a few investors with keen interest in aerospace stocks.
On the other hand, the performance of the broader market remained more or less unimpressive as investors remained skeptical over lingering concern about inflation. The overall skepticism is likely to have spilled over on the Aerospace-Defense space.
Major indices of the Aerospace-Defense space ended in the red over the trailing five trading sessions. Evidently, the S&P 500 Aerospace & Defense (industry) index dropped 2.7%, while the Dow Jones U.S. Aerospace & Defense index slipped 1.9% in the aforementioned time period.
Among the last week’s highlights, defense majors namely Northrop Grumman (NOC - Free Report) , Raytheon Technologies (RTX - Free Report) and Lockheed Martin (LMT - Free Report) secured a number of notable deals from the Department of Defense’s (DoD) daily funding session. Boeing released its Q2 delivery figures. Embraer (ERJ - Free Report) won an order for its E195-E2 jets.
Recap of Past Week’s Important Stories
1. Northrop Grumman’s business unit, Northrop Grumman Systems Corp., won a $3.86 billion contract to provide ground subsystems support for Minuteman III Intercontinental Ballistic Missile. The award has been offered by the Air Force Nuclear Weapons Center, Hill AFB, UT.
The contract is expected to get completed by Jul 6, 2039. Work related to the deal will be executed in Hill AFB, UT; Vandenberg AFB, CA; Malmstrom AFB, MT; Minot AFB, ND; FE Warren AFB, WY; and Offutt AFB, NE (read more: Northrop's Unit Wins $3.9B Deal to Aid Minuteman ICBM).
2. Raytheon Technologies won a $321 million contract for the production of a Stinger missile. Work related to the deal is scheduled to be completed by Jun 30, 2026. The contract has been awarded by the U.S. Army Contracting Command, Redstone Arsenal, AL (read more: Raytheon Wins $321M Stinger Missile Production Deal)
The company secured another contract worth $171.7 million, involving the low-rate initial production for their Next Generation Jammer Mid-Band program (NGJ-MB). The contract was provided by the Naval Air Systems Command, Patuxent River, MD.
3. Lockheed Martin’s business segment, Missile and Fire Control (MFC) won a $161 million modification contract to manufacture High Mobility Artillery Rocket Systems (HIMARS) M142 launchers. The award has been offered by the U.S. Army Contracting Command, Redstone Arsenal, AL.
The contract is expected to get completed by Apr 30, 2023. Work related to the deal will be carried out in different parts of the United States (read more: Lockheed Wins Deal to Produce HIMARS M142 Launchers).
4. Boeing’s delivery figures for the second quarter of 2021 reflected a significant surge of 295% in commercial shipments from the year-ago figure while defense shipments declined 2.3%.
5. Embraer won an order worth $5.82 billion for 30 E195-E2 jets and an option for another 50 from Porter Airlines, based on current list prices. The longer range of E195-E2 jets will give Porter the right to introduce nonstop services in the markets where there is no current direct service or even increase frequencies on high-demand routes.
Over the past five trading sessions, the defense biggies put up a mixed show. While most of the declines were less than 2%, the gains were not more than 1%.
In the last six months, the industry's performance was impressive. Textron (TXT - Free Report) gained the most with 36.7% surge in share price, followed by General Dynamics (GD - Free Report) .
The following table shows the price movement of the major defense players over the past five trading days and during the last six months.
Company
Past Week
Last 6 Months
LMT
-0.55%
8.92%
BA
-5.92%
9.03%
GD
0.71%
23.62%
RTX
-0.54%
22.70%
NOC
-1.57%
21.01%
TXT
0.86%
36.70%
LHX
-0.70%
18.71%
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Defense Stock Roundup: NOC, RTX Win Deals, BA Reports Mixed Q2 Deliveries
Lack of ample contract flows from Pentagon might have restricted U.S. defense stocks from delivering an impressive performance over the last week. Moreover, Boeing’s (BA - Free Report) latest announcement to cut down its production rate as well as delivery target for 787 Dreamliners might have disappointed a few investors with keen interest in aerospace stocks.
On the other hand, the performance of the broader market remained more or less unimpressive as investors remained skeptical over lingering concern about inflation. The overall skepticism is likely to have spilled over on the Aerospace-Defense space.
Major indices of the Aerospace-Defense space ended in the red over the trailing five trading sessions. Evidently, the S&P 500 Aerospace & Defense (industry) index dropped 2.7%, while the Dow Jones U.S. Aerospace & Defense index slipped 1.9% in the aforementioned time period.
Among the last week’s highlights, defense majors namely Northrop Grumman (NOC - Free Report) , Raytheon Technologies (RTX - Free Report) and Lockheed Martin (LMT - Free Report) secured a number of notable deals from the Department of Defense’s (DoD) daily funding session. Boeing released its Q2 delivery figures. Embraer (ERJ - Free Report) won an order for its E195-E2 jets.
Recap of Past Week’s Important Stories
1. Northrop Grumman’s business unit, Northrop Grumman Systems Corp., won a $3.86 billion contract to provide ground subsystems support for Minuteman III Intercontinental Ballistic Missile. The award has been offered by the Air Force Nuclear Weapons Center, Hill AFB, UT.
The contract is expected to get completed by Jul 6, 2039. Work related to the deal will be executed in Hill AFB, UT; Vandenberg AFB, CA; Malmstrom AFB, MT; Minot AFB, ND; FE Warren AFB, WY; and Offutt AFB, NE (read more: Northrop's Unit Wins $3.9B Deal to Aid Minuteman ICBM).
2. Raytheon Technologies won a $321 million contract for the production of a Stinger missile. Work related to the deal is scheduled to be completed by Jun 30, 2026. The contract has been awarded by the U.S. Army Contracting Command, Redstone Arsenal, AL (read more: Raytheon Wins $321M Stinger Missile Production Deal)
The company secured another contract worth $171.7 million, involving the low-rate initial production for their Next Generation Jammer Mid-Band program (NGJ-MB). The contract was provided by the Naval Air Systems Command, Patuxent River, MD.
Majority of the work related to the deal will be performed in Dallas, TX, and Forest, MS. The contract is expected to be completed in October 2023 (read more: Raytheon Wins $172M Deal to Develop Three NGJ-Mid-Band).
3. Lockheed Martin’s business segment, Missile and Fire Control (MFC) won a $161 million modification contract to manufacture High Mobility Artillery Rocket Systems (HIMARS) M142 launchers. The award has been offered by the U.S. Army Contracting Command, Redstone Arsenal, AL.
The contract is expected to get completed by Apr 30, 2023. Work related to the deal will be carried out in different parts of the United States (read more: Lockheed Wins Deal to Produce HIMARS M142 Launchers).
4. Boeing’s delivery figures for the second quarter of 2021 reflected a significant surge of 295% in commercial shipments from the year-ago figure while defense shipments declined 2.3%.
Combining both segments, Boeing’s total deliveries in the second quarter were 122 units compared with 89 units delivered in the year-ago period (read more: Boeing Reports Solid Q2 Commercial & Defense Deliveries).
5. Embraer won an order worth $5.82 billion for 30 E195-E2 jets and an option for another 50 from Porter Airlines, based on current list prices. The longer range of E195-E2 jets will give Porter the right to introduce nonstop services in the markets where there is no current direct service or even increase frequencies on high-demand routes.
The jets are expected to go in service in the second half of 2022 (read more: Embraer SA Gets Porter Airlines' Order of E195-E2 Jets).
Performance
Over the past five trading sessions, the defense biggies put up a mixed show. While most of the declines were less than 2%, the gains were not more than 1%.
In the last six months, the industry's performance was impressive. Textron (TXT - Free Report) gained the most with 36.7% surge in share price, followed by General Dynamics (GD - Free Report) .
The following table shows the price movement of the major defense players over the past five trading days and during the last six months.