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Lockheed (LMT) Wins Contract to Support F-35 Jet Program
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Lockheed Martin Corp.’s (LMT - Free Report) business segment, Aeronautics, recently secured a modification contract involving its F-35 fighter jet program. The contract is expected to be completed by January 2029.
Details of the Deal
Valued at $70.1 million, the award has been offered by the???Naval Air Systems Command, Patuxent River, MD. The latest modification requires Lockheed to provide a redesign for the synchronous dynamic random-access memory to support the F-35 aircraft diminishing manufacturing sources and material shortages. The random-access memory will be used in Technical Refresh
Three integrated core processors and panoramic cockpit displays of F-35 jets. Work related to this deal will be executed in Fort Worth, TX.
What’s Favoring Lockheed?
Rapidly increasing security threats across different regions of the world, like the Russian invasion of Ukraine as well as the long-going unrest in varied parts of the Middle East, have prompted nations to modernize their defense arsenal significantly in recent times. As aerial security constitutes a critical part of a nation’s defense structure, an increased investment trend in technologically advanced fighter jets, which come with enhanced stealth capabilities, like F-35 jets, is being witnessed lately.
It is imperative to mention in this context that Lockheed’s F-35 program is the most lethal fighter jet, which delivers 5th generation for mission readiness. 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, can be further gauged from the fact that Lockheed has delivered 992 F-35 airplanes as of Mar 31, 2024, since its inception. The latest contract win bears yet another testament to the solid demand that the F-35 jets enjoy in the combat jet market.
Growth Prospects
As nations across the globe seek to strengthen their aerial defense capabilities, factors like aging fighter jet fleets, innovation of modern fighter aircraft that offer improved speed, agility, and payload capacity than their predecessors, and frequent cross-border conflicts have been boosting the demand for new-age fighter jets. This might have prompted the Mordor Intelligence firm to project that the global military aviation market will witness a CAGR of 5.2% during 2024-2030.
Such projections indicate immense growth opportunities for prominent combat jet manufacturers like Lockheed. The company has been designing and manufacturing some of the finest military aircraft for more than a century now. LMT’s fighter jet portfolio includes C-130 Super Hercules, F-16 Fighting Falcon, F-21, F-22 Raptor and a few more combat aircraft, in addition to F-35 jets.
Peer Opportunities
LMT apart, a few defense players that are expected to gain from the expanding military aviation market are mentioned below:
Airbus (EADSY - Free Report) : Its military aircraft consists of an A400M airlifter, a C295 tactical transporter, the new-generation A330 Multi Role Tanker Transport and Eurofighter, the most advanced swing-role fighter ever conceived. In addition to manufacturing these combat jets, Airbus has been providing its customers with an extended portfolio of services, ranging from the training of Flight and Ground Crews up to live firing exercises anywhere around the world, for more than 40 years.
EADSY boasts a long-term (three-to-five years) earnings growth rate of 13.9%. The Zacks Consensus Estimate for Airbus’ 2024 sales indicates an improvement of 6.9% from the top line reported in 2023.
Boeing (BA - Free Report) : Its Defense, Space & Security segment engages in the research, development, production and modification of manned and unmanned military aircraft and weapons systems for strike, surveillance and mobility, including fighter and trainer aircraft; vertical lift, including rotorcraft and tilt-rotor aircraft; and commercial derivative aircraft, including anti-submarine and tanker aircraft. 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.
BA boasts a long-term earnings growth rate of 25.5%. It has a trailing four-quarter average earnings surprise of 17.83%.
Northrop Grumman (NOC - Free Report) : It has been a pioneer in the development of a wide range of military aircraft, ranging from fighter jets and stealth bombers to surveillance and electronic warfare jets as well as unmanned aerial vehicles. NOC has built some of the world’s most advanced aircraft, like the innovative B-2 Spirit stealth bomber, game-changing E-2D Advanced Hawkeye, MQ-4C Triton, Global Hawk and a few more 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 six months, shares of LMT have risen 1.6% against the industry’s 4.1% decline.
Image: Bigstock
Lockheed (LMT) Wins Contract to Support F-35 Jet Program
Lockheed Martin Corp.’s (LMT - Free Report) business segment, Aeronautics, recently secured a modification contract involving its F-35 fighter jet program. The contract is expected to be completed by January 2029.
Details of the Deal
Valued at $70.1 million, the award has been offered by the???Naval Air Systems Command, Patuxent River, MD. The latest modification requires Lockheed to provide a redesign for the synchronous dynamic random-access memory to support the F-35 aircraft diminishing manufacturing sources and material shortages. The random-access memory will be used in Technical Refresh
Three integrated core processors and panoramic cockpit displays of F-35 jets.
Work related to this deal will be executed in Fort Worth, TX.
What’s Favoring Lockheed?
Rapidly increasing security threats across different regions of the world, like the Russian invasion of Ukraine as well as the long-going unrest in varied parts of the Middle East, have prompted nations to modernize their defense arsenal significantly in recent times. As aerial security constitutes a critical part of a nation’s defense structure, an increased investment trend in technologically advanced fighter jets, which come with enhanced stealth capabilities, like F-35 jets, is being witnessed lately.
It is imperative to mention in this context that Lockheed’s F-35 program is the most lethal fighter jet, which delivers 5th generation for mission readiness. 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, can be further gauged from the fact that Lockheed has delivered 992 F-35 airplanes as of Mar 31, 2024, since its inception. The latest contract win bears yet another testament to the solid demand that the F-35 jets enjoy in the combat jet market.
Growth Prospects
As nations across the globe seek to strengthen their aerial defense capabilities, factors like aging fighter jet fleets, innovation of modern fighter aircraft that offer improved speed, agility, and payload capacity than their predecessors, and frequent cross-border conflicts have been boosting the demand for new-age fighter jets. This might have prompted the Mordor Intelligence firm to project that the global military aviation market will witness a CAGR of 5.2% during 2024-2030.
Such projections indicate immense growth opportunities for prominent combat jet manufacturers like Lockheed. The company has been designing and manufacturing some of the finest military aircraft for more than a century now. LMT’s fighter jet portfolio includes C-130 Super Hercules, F-16 Fighting Falcon, F-21, F-22 Raptor and a few more combat aircraft, in addition to F-35 jets.
Peer Opportunities
LMT apart, a few defense players that are expected to gain from the expanding military aviation market are mentioned below:
Airbus (EADSY - Free Report) : Its military aircraft consists of an A400M airlifter, a C295 tactical transporter, the new-generation A330 Multi Role Tanker Transport and Eurofighter, the most advanced swing-role fighter ever conceived. In addition to manufacturing these combat jets, Airbus has been providing its customers with an extended portfolio of services, ranging from the training of Flight and Ground Crews up to live firing exercises anywhere around the world, for more than 40 years.
EADSY boasts a long-term (three-to-five years) earnings growth rate of 13.9%. The Zacks Consensus Estimate for Airbus’ 2024 sales indicates an improvement of 6.9% from the top line reported in 2023.
Boeing (BA - Free Report) : Its Defense, Space & Security segment engages in the research, development, production and modification of manned and unmanned military aircraft and weapons systems for strike, surveillance and mobility, including fighter and trainer aircraft; vertical lift, including rotorcraft and tilt-rotor aircraft; and commercial derivative aircraft, including anti-submarine and tanker aircraft. 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.
BA boasts a long-term earnings growth rate of 25.5%. It has a trailing four-quarter average earnings surprise of 17.83%.
Northrop Grumman (NOC - Free Report) : It has been a pioneer in the development of a wide range of military aircraft, ranging from fighter jets and stealth bombers to surveillance and electronic warfare jets as well as unmanned aerial vehicles. NOC has built some of the world’s most advanced aircraft, like the innovative B-2 Spirit stealth bomber, game-changing E-2D Advanced Hawkeye, MQ-4C Triton, Global Hawk and a few more 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 six months, shares of LMT have risen 1.6% against the industry’s 4.1% decline.
Image Source: Zacks Investment Research
Zacks Rank
Lockheed currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.