Lockheed Martin Corporation’s (LMT Quick QuoteLMT - Free Report) business unit, Space Systems, recently clinched a modification contract to provide production and deployed system support for the Trident II (D5) missile. The deal has been awarded by the Strategic System Programs, Washington, D.C.

 

Valued at $445.5 million, the contract is expected to conclude by Sep 30, 2026. Work related to the deal will be carried out in various locations across the United States.

The Trident II D5 is the latest generation of the U.S. Navy's submarine-launched fleet ballistic missiles, following the highly successful Polaris, Poseidon, and Trident I C4 programs.

 

Trident missiles are carried by14 United States Navy Ohio-class submarines with American warheadsand four Royal Navy Vanguard-class submarines with British warheads.

 

It is a three-stage, solid-propellant, inertial-guided ballistic missile developed by Lockheed Martin. The missile can carry multiple independently targeted reentry bodies for a maximum range of over 7,360 km. These missiles cannotbe tracked when they are being operated as it has a sea-based deterrent. Such features make Trident II D5 one of the most destructive and critical weapon systems in the U.S. Navy's arsenal.

Countries globally have been reinforcing their military resources due to intense geo-political tensions and amplified terrorist threats. This has resulted in countries focusing on strengthening their missile system arena. The United States, which is the largest exporter of military weaponries worldwide, is focused on strengthening its military resources.

 

In this context, the submarine-launched ballistic missile (“SLMB”) forms an integral part of U.S strategic nuclear deterrent Triad, while Trident II D5 is akey element of the U.S. strategic nuclear triad and strengthens U.S. strategic deterrence. This has resulted in huge contract inflows for the missile from the U.S Navy. The latest contract win is a testament to that.

 

This is also quite evident from the allocation of a $1.5 billion investment plan, in the U.S. fiscal 2022 defense budget, for Trident II. So, we may expect a solid flow of contracts from the Pentagon involving Trident II D5, which in turn would boost Lockheed’s top-line performance.

According to a report by Markets Research Future, the global rocket and missile market is projected to witness a CAGR of 4.2% over the period of 2020 and 2026.

 

In this context, it is imperative to mention that such growth projections will not only benefit Lockheed Martin but also other missile makers namely Northrop Grumman (NOC Quick QuoteNOC - Free Report) , General Dynamics (GD Quick QuoteGD - Free Report) and Raytheon Technologies (RTX Quick QuoteRTX - Free Report) .

In the past one year, shares of Lockheed have lost 9.4%, compared withthe industry’s decline of 4.9%.

Lockheed Martin currently has a Zacks Rank #4 (Sell).

 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.