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Lockheed (LMT) Wins Contract to Support F-35 Fighter Jet Program
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Lockheed Martin Corp.’s (LMT - Free Report) business unit, Aeronautics, recently clinched a modification contract involving its F-35 fighter jet program. The award has been offered by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $63.5 million, the contract is expected to be completed by August 2024. The latest modification should enable Lockheed to extend services involving continued infrastructure support for F-35 Joint Strike Fighter (JSF) laboratory facilities and F-35 developmental flight test activities. This infrastructure support includes engineering, maintenance, logistics, manpower and material aid.
The contract will serve the U.S. Navy, Air Force, Marine Corps, and F-35 cooperative program partners. Majority of the work related to this deal will be executed in Fort Worth, TX.
What’s Favoring Lockheed?
Nations across the globe are reinforcing their military capabilities to strengthen their defense structure in the growing threat environment worldwide. In this context, military aircraft that play a critical role in military missions have also been witnessing a significant rise in demand. This, in turn, has been ushering in solid order flows for major combat aircraft manufacturers like Lockheed.
Notably, Lockheed’s F-35 program is the most lethal fighter jet in the world and delivers unrivaled advantage to its customers. Equipped with advanced sensors and communications suites, it can serve across every domain, including air, land, sea, space and cyber.
Such remarkable features must have been boosting the demand for this jet, which in turn has enabled Lockheed to deliver 992 F-35 airplanes to date, with 373 jets in the backlog as of Mar 31, 2024. The latest contract win is another testament to the solid demand that the F-35 jets enjoy in the combat jet market.
Such contract wins tend to boost the company’s operating results from the Aeronautics segment, which registered a 9% year-over-year top-line improvement in the last reported quarter, with F-35 program being one of the primary growth catalysts.
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 5.2% 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 upgrade 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
LMT apart, a few other defense players that can gain from the expanding military aviation market are Airbus SE (EADSY - Free Report) , Boeing (BA - Free Report) and Northrop Grumman (NOC - Free Report) .
Airbus’ military aircraft consists of A400M, C295 tactical transporter, the new-generation A330 Multi Role Tanker Transport and 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 17.9%. The Zacks Consensus Estimate for Airbus’ 2024 sales indicates an improvement of 8.2% from the top line reported in 2023.
Boeing’s 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 boasts a long-term earnings growth rate of 25.5%. The company boasts a four-quarter average earnings surprise of 17.83%.
Northrop Grumman 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 $2.1 billion for F-35 programs, $1.7 billion for E-2 and $1.5 billion for Triton.
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 3.2% against the industry’s 10.9% decline.
Image: Bigstock
Lockheed (LMT) Wins Contract to Support F-35 Fighter Jet Program
Lockheed Martin Corp.’s (LMT - Free Report) business unit, Aeronautics, recently clinched a modification contract involving its F-35 fighter jet program. The award has been offered by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $63.5 million, the contract is expected to be completed by August 2024. The latest modification should enable Lockheed to extend services involving continued infrastructure support for F-35 Joint Strike Fighter (JSF) laboratory facilities and F-35 developmental flight test activities. This infrastructure support includes engineering, maintenance, logistics, manpower and material aid.
The contract will serve the U.S. Navy, Air Force, Marine Corps, and F-35 cooperative program partners. Majority of the work related to this deal will be executed in Fort Worth, TX.
What’s Favoring Lockheed?
Nations across the globe are reinforcing their military capabilities to strengthen their defense structure in the growing threat environment worldwide. In this context, military aircraft that play a critical role in military missions have also been witnessing a significant rise in demand. This, in turn, has been ushering in solid order flows for major combat aircraft manufacturers like Lockheed.
Notably, Lockheed’s F-35 program is the most lethal fighter jet in the world and delivers unrivaled advantage to its customers. Equipped with advanced sensors and communications suites, it can serve across every domain, including air, land, sea, space and cyber.
Such remarkable features must have been boosting the demand for this jet, which in turn has enabled Lockheed to deliver 992 F-35 airplanes to date, with 373 jets in the backlog as of Mar 31, 2024. The latest contract win is another testament to the solid demand that the F-35 jets enjoy in the combat jet market.
Such contract wins tend to boost the company’s operating results from the Aeronautics segment, which registered a 9% year-over-year top-line improvement in the last reported quarter, with F-35 program being one of the primary growth catalysts.
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 5.2% 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 upgrade 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
LMT apart, a few other defense players that can gain from the expanding military aviation market are Airbus SE (EADSY - Free Report) , Boeing (BA - Free Report) and Northrop Grumman (NOC - Free Report) .
Airbus’ military aircraft consists of A400M, C295 tactical transporter, the new-generation A330 Multi Role Tanker Transport and 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 17.9%. The Zacks Consensus Estimate for Airbus’ 2024 sales indicates an improvement of 8.2% from the top line reported in 2023.
Boeing’s 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 boasts a long-term earnings growth rate of 25.5%. The company boasts a four-quarter average earnings surprise of 17.83%.
Northrop Grumman 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 $2.1 billion for F-35 programs, $1.7 billion for E-2 and $1.5 billion for Triton.
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 3.2% against the industry’s 10.9% 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.