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Lockheed (LMT) Secures a Contract to Support F-35 Jet Program
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Lockheed Martin Corp.’s (LMT - Free Report) Aeronautics business segment recently secured a contract to procure aircraft armament equipment for its F-35 fighter jets. The award has been provided by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $97 million, the contract is projected to be completed by February 2028. Per the terms of the deal, Lockheed will procure aircraft armament equipment like internal adapters and weapon umbilical cables required to employ long-range strike weapons. This procurement will allow for internal carriage and employment of the Advanced Anti-Radiation Guided Missile – Extended Range weapon for LMT’s F-35 Lightning II aircraft.
The contract will serve the U.S. Air Force, Marine Corps, Navy, Foreign Military Sales customers, and non-U.S. Department of Defense program participants. Work related to this deal will be executed in Fort Worth, TX.
Significance of F-35 Jets
Lockheed’s F-35 is the most lethal, survivable and connected fighter jet in the world. It can securely connect high-tech platforms to share information across every domain, air, land, sea, space and cyber. The aircraft comes in three main variants, which are F-35A (conventional takeoff and landing), F-35B (short take-off and vertical landing) and F-35C (carrier-based).
Such remarkable features of this fighter jet are likely to have been bolstering the demand for the F-35 aircraft. F-35’s solid demand can be further gauged from the fact that Lockheed has delivered 992 F-35 airplanes since the program's inception, with 373 jets in the backlog as of Mar 31, 2024.
Looking ahead, LMT expects to deliver 147-153 jets in 2024 and 156 in 2025 and beyond. This, along with the latest contract win, can be expected to significantly boost Lockheed’s revenue growth in the coming quarters, considering the fact that F-35 jet program generated approximately 25% of the company’s total consolidated net sales in first-quarter 2024.
LMT’s Growth Prospects
Amid the geopolitical tensions prevalent across the globe, nations are rapidly augmenting defense purchases to strengthen their warfare capabilities. This has led to an increased demand for fighter jets, which form an integral part of a country’s defense products. Per a report by the Mordor Intelligence firm, the global military aviation market is estimated to witness a CAGR of 5.23% during 2024-2030.
Such projections indicate immense growth opportunities for prominent combat jet manufacturers like Lockheed. Its Aeronautics segment is engaged in the research, design, development, manufacture, integration, sustainment, support and upgradation of advanced military aircraft, including combat and air mobility aircraft, unmanned air vehicles and related technologies. The company’s fighter jet portfolio includes C-130 Super Hercules, F-16 Fighting Falcon jet and F-16 Fighting Falcon, in addition to F-35 jets.
Peer Opportunities
Other defense players that are expected to gain from the expanding global military aviation market are discussed below:
Airbus (EADSY - Free Report) : Its military aircraft consists of the A400M, C295 tactical transporter, the new-generation A330 Multi Role Tanker Transport and the Eurofighter, the most advanced swing-role fighter ever conceived. The company delivered a total of 1,783 military aircraft as of Dec 31, 2023.
EADSY boasts a long-term (three-to-five years) earnings growth rate of 21.4%. The Zacks Consensus Estimate for Airbus’ 2024 sales indicates an improvement of 8.2% from the top line reported in 2023.
The Boeing Company (BA - Free Report) : Its product portfolio includes a range of combat-proven aircraft like the F/A-18 Super Hornet, P-8, C-17 Globemaster III, EA-18G and a few more. In 2023, Boeing delivered 22 F/A-18s, nine F-15s, three T-7A Red Hawks and 11 P-8 models.
BA has a long-term earnings growth rate of 27.5%. The consensus estimate for Boeing’s 2024 sales indicates an improvement of 2.1% from the top line reported in 2023.
Northrop Grumman (NOC - Free Report) : It has built some of the world’s most advanced aircraft, ranging from the innovative B-2 Spirit stealth bomber to the game-changing E-2D Advanced Hawkeye. The significant awards won by NOC in 2023 included $1.7 billion for E-2 and $1.5 billion for Triton jets.
NOC boasts a long-term earnings growth rate of 8.7%. The Zacks Consensus Estimate for Northrop Grumman’s 2024 sales indicates an improvement of 4.6% from the top line reported in 2023.
Price Performance
In the past year, shares of LMT have risen 4.5% against the industry’s 9.5% decline.
Image: Bigstock
Lockheed (LMT) Secures a Contract to Support F-35 Jet Program
Lockheed Martin Corp.’s (LMT - Free Report) Aeronautics business segment recently secured a contract to procure aircraft armament equipment for its F-35 fighter jets. The award has been provided by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $97 million, the contract is projected to be completed by February 2028. Per the terms of the deal, Lockheed will procure aircraft armament equipment like internal adapters and weapon umbilical cables required to employ long-range strike weapons. This procurement will allow for internal carriage and employment of the Advanced Anti-Radiation Guided Missile – Extended Range weapon for LMT’s F-35 Lightning II aircraft.
The contract will serve the U.S. Air Force, Marine Corps, Navy, Foreign Military Sales customers, and non-U.S. Department of Defense program participants. Work related to this deal will be executed in Fort Worth, TX.
Significance of F-35 Jets
Lockheed’s F-35 is the most lethal, survivable and connected fighter jet in the world. It can securely connect high-tech platforms to share information across every domain, air, land, sea, space and cyber. The aircraft comes in three main variants, which are F-35A (conventional takeoff and landing), F-35B (short take-off and vertical landing) and F-35C (carrier-based).
Such remarkable features of this fighter jet are likely to have been bolstering the demand for the F-35 aircraft. F-35’s solid demand can be further gauged from the fact that Lockheed has delivered 992 F-35 airplanes since the program's inception, with 373 jets in the backlog as of Mar 31, 2024.
Looking ahead, LMT expects to deliver 147-153 jets in 2024 and 156 in 2025 and beyond. This, along with the latest contract win, can be expected to significantly boost Lockheed’s revenue growth in the coming quarters, considering the fact that F-35 jet program generated approximately 25% of the company’s total consolidated net sales in first-quarter 2024.
LMT’s Growth Prospects
Amid the geopolitical tensions prevalent across the globe, nations are rapidly augmenting defense purchases to strengthen their warfare capabilities. This has led to an increased demand for fighter jets, which form an integral part of a country’s defense products. Per a report by the Mordor Intelligence firm, the global military aviation market is estimated to witness a CAGR of 5.23% during 2024-2030.
Such projections indicate immense growth opportunities for prominent combat jet manufacturers like Lockheed. Its Aeronautics segment is engaged in the research, design, development, manufacture, integration, sustainment, support and upgradation of advanced military aircraft, including combat and air mobility aircraft, unmanned air vehicles and related technologies. The company’s fighter jet portfolio includes C-130 Super Hercules, F-16 Fighting Falcon jet and F-16 Fighting Falcon, in addition to F-35 jets.
Peer Opportunities
Other defense players that are expected to gain from the expanding global military aviation market are discussed below:
Airbus (EADSY - Free Report) : Its military aircraft consists of the A400M, C295 tactical transporter, the new-generation A330 Multi Role Tanker Transport and the Eurofighter, the most advanced swing-role fighter ever conceived. The company delivered a total of 1,783 military aircraft as of Dec 31, 2023.
EADSY boasts a long-term (three-to-five years) earnings growth rate of 21.4%. The Zacks Consensus Estimate for Airbus’ 2024 sales indicates an improvement of 8.2% from the top line reported in 2023.
The Boeing Company (BA - Free Report) : Its product portfolio includes a range of combat-proven aircraft like the F/A-18 Super Hornet, P-8, C-17 Globemaster III, EA-18G and a few more. In 2023, Boeing delivered 22 F/A-18s, nine F-15s, three T-7A Red Hawks and 11 P-8 models.
BA has a long-term earnings growth rate of 27.5%. The consensus estimate for Boeing’s 2024 sales indicates an improvement of 2.1% from the top line reported in 2023.
Northrop Grumman (NOC - Free Report) : It has built some of the world’s most advanced aircraft, ranging from the innovative B-2 Spirit stealth bomber to the game-changing E-2D Advanced Hawkeye. The significant awards won by NOC in 2023 included $1.7 billion for E-2 and $1.5 billion for Triton jets.
NOC boasts a long-term earnings growth rate of 8.7%. The Zacks Consensus Estimate for Northrop Grumman’s 2024 sales indicates an improvement of 4.6% from the top line reported in 2023.
Price Performance
In the past year, shares of LMT have risen 4.5% against the industry’s 9.5% decline.
Image Source: Zacks Investment Research
Zacks Rank
Lockheed currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.