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Lockheed (LMT) Wins $1.2B Deal to Aid Trident II Missile
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Lockheed Martin Corp.’s (LMT - Free Report) Space business segment recently secured a modification contract involving Trident II (D5) missile. The award has been offered by the Strategic Systems Programs, Washington, D.C.
Valued at $1.20 billion, the contract is expected to be completed by Sep 30, 2028. Per the terms of the deal, Lockheed will provide production and deployed systems support for Trident II (D5) missile.
A major portion of the work related to this deal will be carried out in Titusville, FL, and Magna, UT. This contract will also benefit a foreign military sale to the United Kingdom.
Significance of Trident II
The Trident II D5 fleet ballistic missile is a program with the U.S. Navy for the only submarine-launched intercontinental ballistic missile currently in production in the United States. It 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.
Lockheed’s Space Systems unit is the prime contractor for the development, production and support equipment of this missile. The company also supplies technical and logistical support at sites where the missile is deployed.
Due to its remarkable features, which are well-suited for any military mission, Lockheed continues to witness a steady inflow of orders involving the Trident missile. The latest contract win is a testament to that. This shall bolster LMT’s revenues from the Space Systems unit.
Growth Prospects
Of late, nations have been increasing their spending on military equipment and weaponry to modernize and upgrade their defense systems amid rising geopolitical tensions. In this context, the demand for missiles is likely to gain momentum as these play a very important role in military missions.
Per the latest report from the Mordor Intelligence firm, the global missile and missile defense systems market is expected to witness a CAGR of 4.8% over the 2023-2028 period. Such projections exemplify immense opportunities for Lockheed to capitalize on the expanding market.
Notably, the company’s Space business unit, apart from developing satellites and space transportation system, also builds strike missile as well as missile defense systems. Its major programs include Next Generation Interceptor — a program with the Missile Defense Agency — that utilizes next generation propulsion and sensors to provide homeland missile defense, apart from Trident II missile.
Other prominent defense majors that are likely to enjoy the perks of the expanding missile defense market are Northrop Grumman (NOC - Free Report) , General Dynamics (GD - Free Report) and RTX Corp. (RTX - Free Report) , which are involved in missile manufacturing or providing support services for the same.
Northrop Grumman’s Missile Products business unit is a leading U.S. provider of solid rocket propulsion for national security and defense, providing stages for weapon systems, such as air-launched missiles, interceptors, submarine-launched systems and hypersonic missile systems.
Northrop has a long-term earnings growth rate of 3.7%. The Zacks Consensus Estimate for NOC’s 2023 sales implies growth of 5.8% from the prior-year reported figure.
General Dynamics’ Ordnance and Tactical Systems designs, develops and produces a comprehensive array of sophisticated weapon systems for ground forces. It also produces next-generation weapon systems for shipboard and aircraft applications. OTS maintains a leading position in providing missile subsystems in support of U.S. tactical and strategic missiles.
General Dynamics boasts a long-term earnings growth rate of 9.2%. The Zacks Consensus Estimate for GD’s 2023 sales indicates growth of 7.8% from the prior-year reported figure.
RTX’s Missiles & Defense is a leading designer, developer, integrator, producer and sustainer of integrated air and missile defense systems. Its technology delivers unprecedented combat power to the world’s most sophisticated fourth and fifth-generation aircraft and across every mission phase.
RTX boasts a long-term earnings growth rate of 9.4%. The Zacks Consensus Estimate for RTX’s 2023 sales indicates growth of 9.9% from the prior-year reported figure.
Price Movement
In the past year, shares of Lockheed have risen 0.3% against the industry’s decline of 5.2%.
Image: Bigstock
Lockheed (LMT) Wins $1.2B Deal to Aid Trident II Missile
Lockheed Martin Corp.’s (LMT - Free Report) Space business segment recently secured a modification contract involving Trident II (D5) missile. The award has been offered by the Strategic Systems Programs, Washington, D.C.
Valued at $1.20 billion, the contract is expected to be completed by Sep 30, 2028. Per the terms of the deal, Lockheed will provide production and deployed systems support for Trident II (D5) missile.
A major portion of the work related to this deal will be carried out in Titusville, FL, and Magna, UT. This contract will also benefit a foreign military sale to the United Kingdom.
Significance of Trident II
The Trident II D5 fleet ballistic missile is a program with the U.S. Navy for the only submarine-launched intercontinental ballistic missile currently in production in the United States. It 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.
Lockheed’s Space Systems unit is the prime contractor for the development, production and support equipment of this missile. The company also supplies technical and logistical support at sites where the missile is deployed.
Due to its remarkable features, which are well-suited for any military mission, Lockheed continues to witness a steady inflow of orders involving the Trident missile. The latest contract win is a testament to that. This shall bolster LMT’s revenues from the Space Systems unit.
Growth Prospects
Of late, nations have been increasing their spending on military equipment and weaponry to modernize and upgrade their defense systems amid rising geopolitical tensions. In this context, the demand for missiles is likely to gain momentum as these play a very important role in military missions.
Per the latest report from the Mordor Intelligence firm, the global missile and missile defense systems market is expected to witness a CAGR of 4.8% over the 2023-2028 period. Such projections exemplify immense opportunities for Lockheed to capitalize on the expanding market.
Notably, the company’s Space business unit, apart from developing satellites and space transportation system, also builds strike missile as well as missile defense systems. Its major programs include Next Generation Interceptor — a program with the Missile Defense Agency — that utilizes next generation propulsion and sensors to provide homeland missile defense, apart from Trident II missile.
Other prominent defense majors that are likely to enjoy the perks of the expanding missile defense market are Northrop Grumman (NOC - Free Report) , General Dynamics (GD - Free Report) and RTX Corp. (RTX - Free Report) , which are involved in missile manufacturing or providing support services for the same.
Northrop Grumman’s Missile Products business unit is a leading U.S. provider of solid rocket propulsion for national security and defense, providing stages for weapon systems, such as air-launched missiles, interceptors, submarine-launched systems and hypersonic missile systems.
Northrop has a long-term earnings growth rate of 3.7%. The Zacks Consensus Estimate for NOC’s 2023 sales implies growth of 5.8% from the prior-year reported figure.
General Dynamics’ Ordnance and Tactical Systems designs, develops and produces a comprehensive array of sophisticated weapon systems for ground forces. It also produces next-generation weapon systems for shipboard and aircraft applications. OTS maintains a leading position in providing missile subsystems in support of U.S. tactical and strategic missiles.
General Dynamics boasts a long-term earnings growth rate of 9.2%. The Zacks Consensus Estimate for GD’s 2023 sales indicates growth of 7.8% from the prior-year reported figure.
RTX’s Missiles & Defense is a leading designer, developer, integrator, producer and sustainer of integrated air and missile defense systems. Its technology delivers unprecedented combat power to the world’s most sophisticated fourth and fifth-generation aircraft and across every mission phase.
RTX boasts a long-term earnings growth rate of 9.4%. The Zacks Consensus Estimate for RTX’s 2023 sales indicates growth of 9.9% from the prior-year reported figure.
Price Movement
In the past year, shares of Lockheed have risen 0.3% against the industry’s decline of 5.2%.
Image Source: Zacks Investment Research
Zacks Rank
LMT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.