Lockheed Martin Corp.’s (LMT Quick QuoteLMT - Free Report) business unit, Rotary and Mission Systems, recently clinched a modification contract involving the Aegis Weapon System (AWS). Per the terms, Lockheed Martin will conduct ship integration and test of the AWS for AWS Baselines through Advanced Capability Build 16.

Valued at $50.3 million, the contract is expected to be completed by September 2022. Naval Sea Systems Command, Washington, D.C. awarded this deal to Lockheed Martin.

 

The contract comprises AEGIS shipboard integration engineering, AEGIS Test Team support, AEGIS Modernization Team engineering support, Ballistic Missile Defense Test Team support, and AWS element assessments services.

 

Majority of work related to this contract will be executed in Moorestown, NJ.

Aegis is an integrated missile guidance system used in the U.S. Navy and allied ships to protect the battle group. It is the world’s most advanced combat system that can simultaneously destroy land targets, submarines and surface ships along with providing protection from aircraft, cruise missiles and ballistic missiles.

In May 2021, Lockheed Martin secured a deal worth $10.7 billion from the U.S. State Department for the sale of four Aegis missile defense systems that will serve the Canadian government.

 

Earlier, in January, the company won a $750 million contract from the U.S Navy to modernize and maintain Aegis Combat Systems for six customers under the foreign military sales program. Such notable contract wins highlight the strong demand that Lockheed’s Aegis system enjoys in the overseas market, apart from its well-established market in the U.S. defense space.

Countries globally have been reinforcing their military resources due to intense geo-political tensions and amplified terrorist threats. This has spurred demand for missile systems. The United States, which is the largest exporter of military weaponries worldwide, is also focused on strengthening its military resources, with Aegis being one of the key defense programs. This is quite evident from the allotment of a $1 billion investment plan in the U.S. fiscal 2022 defense budget for Aegis Ballistic Missile Defense systems. So we may expect a solid flow of contracts from the Pentagon involving Aegis systems, with the latest contract bearing a testament to that.

 

It is imperative to mention in this context that such budget allocation will not only benefit Lockheed Martin but also Raytheon Technologies (RTX Quick QuoteRTX - Free Report) , which is the designated agent and manufacturer of two Aegis components, the SPY-1D(V) Transmitter and the MK 99 Fire Control System. 

In the past one year, shares of the company have lost 7.2% against the industry’s growth of 10.4%.

 

Lockheed Martin currently carries a Zacks Rank #3 (Hold).

 

Some better-ranked companies in the same industry are Textron (TXT Quick QuoteTXT - Free Report) and Embraer S.A. (ERJ Quick QuoteERJ - Free Report) . Both the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

Textron has a long-term earnings growth rate of 28.3%. The Zacks Consensus Estimate for its current-year earnings has improved 2.2% over the last 30 days.

 

Embraer boasts a long-term earnings growth rate of 17%. The Zacks Consensus Estimate for current-year earnings has improved from a loss of 92 cents to a loss of 52 cents over the last 30 days.