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General Dynamics (GD) Secures Contract to Support M1A1SA/M88
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General Dynamics Corporation’s (GD - Free Report) business unit, Land Systems, recently clinched a $15.9 million modification contract to provide contractor logistics support services for the M1A1SA Abrams Main Battle Tank and the M88 recovery vehicle. The contract has been awarded by the Army Contracting Command, Detroit Arsenal, MI.
The work related to this contract will be executed in Camp Taji, IQ. The contract is expected to be completed by Dec 13, 2023.
What’s Favoring General Dynamics?
Nations are reinforcing their defense capabilities to strengthen their defense structure. This heightened expenditure also involves additional spending on military tank capabilities that are crucial for land warfare.
This tends to benefit General Dynamics’ Land System unit, which is the primary contractor for military battle tanks and has won multiple manufacturing and support service orders for the same. The company strives to sustain such order inflows due to its intent to keep evolving military tanks per the emerging needs of military missions.
Consequently, the Abrams battle tank has a legacy of unparalleled performance. Moving forward, General Dynamics intends to reduce its operational and support costs, thus extending the service life to 2030 and bolstering the M1A1’s capabilities in urban operations. Such efficiency would result in more order inflows for the company, like the latest one.
Such order strength is likely to keep its backlog count strong, thereby steadily bolstering its revenue generation prospects.
Growth Prospects & Peer Moves
Going forward, per a report from the Fortune Business Insights firm, the global armored vehicle market is projected to witness a CAGR of 6.2% during the 2022-2030 period. This market growth opportunity should boost General Dynamics’ operating results as it is one of the prime contractors of armored vehicles.
Other defense majors poised to benefit from the expanding armored vehicle market are BAE Systems (BAESY - Free Report) , Northrop Grumman (NOC - Free Report) and RTX Corporation (RTX - Free Report) .
BAE Systems designs, manufactures, upgrades and supports tracked, specialty-tracked, and wheeled and amphibious combat vehicles. Some of BAE Systems’ combat vehicles are the Armored Multi-Purpose Vehicle, CV90, CV90MkIV, CV90 IFV, etc.
BAESY boasts a long-term earnings growth rate of 13.6%. The Zacks Consensus Estimate for BAE Systems’ 2023 sales indicates growth of 33.6% from the 2022 levels.
Northrop Grumman specializes in innovating low-cost, highly reliable and precise weapons and ammunition for battle tanks. It is the world’s top producer of medium-caliber live and training ammunition and gun systems, with more than 5 million units built in the last five years.
Northrop’s long-term earnings growth rate is pegged at 2.4%. The Zacks Consensus Estimate of NOC’s 2023 sales implies a growth rate of 6.6% from the prior-year figure.
RTX is currently teaming up with a handful of companies, including American Rheinmetall Vehicles, Textron, L3Harris Technologies and a few more, to meet the U.S. Army’s current requirement for a true, next-generation Optionally Manned Fighting Vehicle, namely the Lynx XM30 Combat Vehicle. This is a next-generation, tracked, armored fighting vehicle designed to address the critical challenges of the future battlefield.
The long-term earnings growth of RTXis pegged at 9.4%. The Zacks Consensus Estimate of RTX’s 2023 sales calls for a growth rate of 10.5% from a year ago.
Price Performance
Shares of General Dynamics have increased 20% in the past six months against the industry’s 3.6% decline.
Image: Bigstock
General Dynamics (GD) Secures Contract to Support M1A1SA/M88
General Dynamics Corporation’s (GD - Free Report) business unit, Land Systems, recently clinched a $15.9 million modification contract to provide contractor logistics support services for the M1A1SA Abrams Main Battle Tank and the M88 recovery vehicle. The contract has been awarded by the Army Contracting Command, Detroit Arsenal, MI.
The work related to this contract will be executed in Camp Taji, IQ. The contract is expected to be completed by Dec 13, 2023.
What’s Favoring General Dynamics?
Nations are reinforcing their defense capabilities to strengthen their defense structure. This heightened expenditure also involves additional spending on military tank capabilities that are crucial for land warfare.
This tends to benefit General Dynamics’ Land System unit, which is the primary contractor for military battle tanks and has won multiple manufacturing and support service orders for the same. The company strives to sustain such order inflows due to its intent to keep evolving military tanks per the emerging needs of military missions.
Consequently, the Abrams battle tank has a legacy of unparalleled performance. Moving forward, General Dynamics intends to reduce its operational and support costs, thus extending the service life to 2030 and bolstering the M1A1’s capabilities in urban operations. Such efficiency would result in more order inflows for the company, like the latest one.
Such order strength is likely to keep its backlog count strong, thereby steadily bolstering its revenue generation prospects.
Growth Prospects & Peer Moves
Going forward, per a report from the Fortune Business Insights firm, the global armored vehicle market is projected to witness a CAGR of 6.2% during the 2022-2030 period. This market growth opportunity should boost General Dynamics’ operating results as it is one of the prime contractors of armored vehicles.
Other defense majors poised to benefit from the expanding armored vehicle market are BAE Systems (BAESY - Free Report) , Northrop Grumman (NOC - Free Report) and RTX Corporation (RTX - Free Report) .
BAE Systems designs, manufactures, upgrades and supports tracked, specialty-tracked, and wheeled and amphibious combat vehicles. Some of BAE Systems’ combat vehicles are the Armored Multi-Purpose Vehicle, CV90, CV90MkIV, CV90 IFV, etc.
BAESY boasts a long-term earnings growth rate of 13.6%. The Zacks Consensus Estimate for BAE Systems’ 2023 sales indicates growth of 33.6% from the 2022 levels.
Northrop Grumman specializes in innovating low-cost, highly reliable and precise weapons and ammunition for battle tanks. It is the world’s top producer of medium-caliber live and training ammunition and gun systems, with more than 5 million units built in the last five years.
Northrop’s long-term earnings growth rate is pegged at 2.4%. The Zacks Consensus Estimate of NOC’s 2023 sales implies a growth rate of 6.6% from the prior-year figure.
RTX is currently teaming up with a handful of companies, including American Rheinmetall Vehicles, Textron, L3Harris Technologies and a few more, to meet the U.S. Army’s current requirement for a true, next-generation Optionally Manned Fighting Vehicle, namely the Lynx XM30 Combat Vehicle. This is a next-generation, tracked, armored fighting vehicle designed to address the critical challenges of the future battlefield.
The long-term earnings growth of RTXis pegged at 9.4%. The Zacks Consensus Estimate of RTX’s 2023 sales calls for a growth rate of 10.5% from a year ago.
Price Performance
Shares of General Dynamics have increased 20% in the past six months against the industry’s 3.6% decline.
Image Source: Zacks Investment Research
Zacks Rank
General Dynamics currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.