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Lockheed (LMT) Wins $227M Deal for Army Tactical Missile System
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Lockheed Martin Corp. (LMT - Free Report) recently secured a contract to procure Army Tactical Missile System (“ATACMS”) guided missile and launching assembly. The Army Contracting Command, Redstone Arsenal, AL, has provided the award.
Valued at $226.9 million, the contract is expected to be completed by Dec 30, 2028. Work related to this deal will be executed in Grand Prairie, TX.
The contract will serve the governments of Estonia, Latvia, Lithuania, Morocco and Poland.
Rising Missile Demand & Lockheed
Rapidly increasing geopolitical tensions worldwide, along with heightened regional conflicts in different parts of the globe, like the Middle East, Eastern Europe and the South China Sea over the last decade, have prompted nations to bolster their defense capabilities. Since missiles constitute a large share of a nation’s defense arsenals, countries are investing heftily these days in advanced missile systems for deterrence and defense. This, in turn, has been boosting the demand for technologically advanced missile systems.
When it comes to purchase of missiles, Lockheed remains one of the top choices as a missile manufacturer. Notably, the company’s broad portfolio of missile products includes air-to-air missiles to give pilots air supremacy; helicopter-launched anti-armor missiles to destroy enemy tanks and other armored vehicles; man-portable short-range anti-armor and assault weapons; and kinetic energy hyper-velocity missiles. These can defeat all current and future armored threats as well as hit-to-kill air defense systems that protect the troops from ballistic missiles, cruise missiles, enemy aircraft and weapons of mass destruction.
In particular, LMT’s ATACMS is a conventional surface-to-surface artillery weapon system capable of striking targets well beyond the range of existing Army cannons, rockets and other missiles. It comes with an improved guidance package with Global Positioning System (“GPS”) and offers a maximum range of 300 kilometers. These features must have been boosting the demand for ATACMS, the latest contract win being a bright example of that.
Growth Prospects
With the ongoing hostilities across the globe, the global peace index indicates an unstable environment. As a result, the demand for military weapons — especially missiles — has increased in the defense industry as nations attempt to defend their borders from previously unheard-of attacks.
This must have prompted the Mordor Intelligence firm to project that the global missiles and missiles defense system market will witness a CAGR of 5% over the 2024-2029 period. Such growth opportunities offered by the aforementioned market should bode well for Lockheed, which is a prominent missile manufacturer.
Its major missile programs include the Patriot Advanced Capability-3 (PAC-3) and Terminal High Altitude Area Defense (“THAAD”) air and missile defense programs, Multiple Launch Rocket System (“MLRS”), Precision Strike Missile (PrSM), Joint Air-to-Surface Standoff Missile (“JASSM”), Long Range AntiShip Missile (“LRASM”), the Hellfire tactical and strike missile programs and the Javelin program, which is an anti-tank precision weapon system.
LMT apart, defense contractors that are likely to benefit from the growth opportunities offered by the missiles and missile defense system market are as follows:
Northrop Grumman (NOC - Free Report) : It creates and manufactures warheads, fuses, sophisticated high-speed propulsion systems and other missile components. The company is one of the top suppliers of solid rocket propulsion for air-launched missiles, interceptors, submarine-launched weapons and hypersonic missile systems.
Northrop has a long-term (three to five years) earnings growth rate of 8.7%. The Zacks Consensus Estimate for NOC’s 2024 sales suggests growth of 4.6% from the prior-year reported figure.
RTX Corp (RTX - Free Report) : It offers a variety of combat-proven missile defense systems, including the Patriot missile, Standard Missiles, Advanced Medium-Range Air-to-Air Missiles, Evolved Seasparrow Missiles, the Tomahawk cruise missile and a few more. To keep up with its growing demand for a wide variety of missiles, RTX broke ground with a $115 million worth, 26,000-square-foot expansion of its Redstone Raytheon Missile Integration Facility in April 2024.
RTX boasts a long-term earnings growth rate of 10.6%. The Zacks Consensus Estimate for its 2024 sales implies an improvement of 6.2% from the 2023 reported figure.
The Boeing Company (BA - Free Report) : For almost 25 years, Boeing has been providing the United States, its allies and international partners with air and missile defense systems. The Avenger Air Defense System, Ground-Based Midcourse Defense and a few additional missiles are among its product offerings.
BA boasts a long-term earnings growth rate of 25.5%. The stock holds an average four-quarter earnings surprise of 17.83%.
Price Movement
In the past year, shares of Lockheed have risen 3.2% against the industry’s decline of 10%.
Image: Bigstock
Lockheed (LMT) Wins $227M Deal for Army Tactical Missile System
Lockheed Martin Corp. (LMT - Free Report) recently secured a contract to procure Army Tactical Missile System (“ATACMS”) guided missile and launching assembly. The Army Contracting Command, Redstone Arsenal, AL, has provided the award.
Valued at $226.9 million, the contract is expected to be completed by Dec 30, 2028. Work related to this deal will be executed in Grand Prairie, TX.
The contract will serve the governments of Estonia, Latvia, Lithuania, Morocco and Poland.
Rising Missile Demand & Lockheed
Rapidly increasing geopolitical tensions worldwide, along with heightened regional conflicts in different parts of the globe, like the Middle East, Eastern Europe and the South China Sea over the last decade, have prompted nations to bolster their defense capabilities. Since missiles constitute a large share of a nation’s defense arsenals, countries are investing heftily these days in advanced missile systems for deterrence and defense. This, in turn, has been boosting the demand for technologically advanced missile systems.
When it comes to purchase of missiles, Lockheed remains one of the top choices as a missile manufacturer. Notably, the company’s broad portfolio of missile products includes air-to-air missiles to give pilots air supremacy; helicopter-launched anti-armor missiles to destroy enemy tanks and other armored vehicles; man-portable short-range anti-armor and assault weapons; and kinetic energy hyper-velocity missiles. These can defeat all current and future armored threats as well as hit-to-kill air defense systems that protect the troops from ballistic missiles, cruise missiles, enemy aircraft and weapons of mass destruction.
In particular, LMT’s ATACMS is a conventional surface-to-surface artillery weapon system capable of striking targets well beyond the range of existing Army cannons, rockets and other missiles. It comes with an improved guidance package with Global Positioning System (“GPS”) and offers a maximum range of 300 kilometers. These features must have been boosting the demand for ATACMS, the latest contract win being a bright example of that.
Growth Prospects
With the ongoing hostilities across the globe, the global peace index indicates an unstable environment. As a result, the demand for military weapons — especially missiles — has increased in the defense industry as nations attempt to defend their borders from previously unheard-of attacks.
This must have prompted the Mordor Intelligence firm to project that the global missiles and missiles defense system market will witness a CAGR of 5% over the 2024-2029 period. Such growth opportunities offered by the aforementioned market should bode well for Lockheed, which is a prominent missile manufacturer.
Its major missile programs include the Patriot Advanced Capability-3 (PAC-3) and Terminal High Altitude Area Defense (“THAAD”) air and missile defense programs, Multiple Launch Rocket System (“MLRS”), Precision Strike Missile (PrSM), Joint Air-to-Surface Standoff Missile (“JASSM”), Long Range AntiShip Missile (“LRASM”), the Hellfire tactical and strike missile programs and the Javelin program, which is an anti-tank precision weapon system.
LMT apart, defense contractors that are likely to benefit from the growth opportunities offered by the missiles and missile defense system market are as follows:
Northrop Grumman (NOC - Free Report) : It creates and manufactures warheads, fuses, sophisticated high-speed propulsion systems and other missile components. The company is one of the top suppliers of solid rocket propulsion for air-launched missiles, interceptors, submarine-launched weapons and hypersonic missile systems.
Northrop has a long-term (three to five years) earnings growth rate of 8.7%. The Zacks Consensus Estimate for NOC’s 2024 sales suggests growth of 4.6% from the prior-year reported figure.
RTX Corp (RTX - Free Report) : It offers a variety of combat-proven missile defense systems, including the Patriot missile, Standard Missiles, Advanced Medium-Range Air-to-Air Missiles, Evolved Seasparrow Missiles, the Tomahawk cruise missile and a few more. To keep up with its growing demand for a wide variety of missiles, RTX broke ground with a $115 million worth, 26,000-square-foot expansion of its Redstone Raytheon Missile Integration Facility in April 2024.
RTX boasts a long-term earnings growth rate of 10.6%. The Zacks Consensus Estimate for its 2024 sales implies an improvement of 6.2% from the 2023 reported figure.
The Boeing Company (BA - Free Report) : For almost 25 years, Boeing has been providing the United States, its allies and international partners with air and missile defense systems. The Avenger Air Defense System, Ground-Based Midcourse Defense and a few additional missiles are among its product offerings.
BA boasts a long-term earnings growth rate of 25.5%. The stock holds an average four-quarter earnings surprise of 17.83%.
Price Movement
In the past year, shares of Lockheed have risen 3.2% against the industry’s decline of 10%.
Image Source: Zacks Investment Research
Zacks Rank
Lockheed currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.