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Lockheed Wins a $3.4B Deal for Guided Multiple Launch Rocket System
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Lockheed Martin Corp. (LMT - Free Report) recently clinched a modification contract for the Guided Multiple Launch Rocket System (GMLRS). The U.S. Army Contracting Command, Redstone Arsenal, AL, has provided the award.
Valued at $3.43 billion, the contract is projected to be completed by Oct. 20, 2027.
What’s Favoring LMT Stock?
Spending on defense products has increased manifold in the last decade as frequent cross-border conflicts along with civil unrest in different countries have instilled fear among nations across the globe. With missile strength constituting a key element of a nation’s defense backbone, the demand for more technologically advanced and lethal missiles has been rising lately. Lockheed, being a prominent missile manufacturer, has been witnessing a solid inflow of contracts from the Pentagon and other U.S. allies involving the design, build and upgrade of its combat-proven missiles. The latest contract win is a bright example of that.
Notably, LMT’s MLRS family of munitions includes a variety of precision-strike rockets and missiles, with ongoing evolutionary development to meet the needs of today’s warfighter. These are fired from both the MLRS M270 family of launchers and the HIMARS launchers.
In particular, GMLRS fires surface-to-surface rockets and has been highly effective in recent combat operations. The fact that Lockheed has manufactured more than 60,000 GMLRS rockets to date reflects the solid demand that this product enjoys in the global defense space.
LMT’s Growth Prospects
Increasingly violent conflicts witnessed in the past few years in different parts of the world have led to rapid deterioration in global peacefulness, thereby setting the stage for more nations to invest heftily in defense products. This should bode well for the missile market, as nations worldwide strive to protect their borders from unprecedented attacks.
A notable surge in global demand and supply must have prompted Mordor Intelligence to project a CAGR of 5% for the missile and missile defense systems market in the 2024-2029 period.
Such a solid market growth projection should benefit Lockheed, considering its proven proficiency in missile manufacturing. The company’s Missiles and Fire Control unit provides a handful of combat-proven air and missile defense systems as well as tactical missiles, apart from MLRS. These include Joint Air-to-Surface Standoff Missile, Long Range Anti-Ship Missile and a few more missile programs.
Opportunities for Peers
Apart from LMT, other prominent defense contractors that stand to benefit from the expanding missile and missile defense systems market are as follows:
Northrop Grumman (NOC - Free Report) : Northrop is a prominent developer of missile systems and counter systems, including strategic deterrents, subsystems and components. On Aug. 27, 2024, the company announced that it is redesigning the Intercontinental Ballistic Missile target vehicle for the Missile Defense Agency (MDA).
NOC boasts a long-term earnings growth rate of 8.7%. The Zacks Consensus Estimate for Northrop’s 2024 sales indicates an improvement of 5.4% from the 2023 reported figure.
L3Harris Technologies (LHX - Free Report) : The company produces the solid propellant rocket motor for the GMLRS. To further strengthen its footprint in the missile market, L3Harris acquired Aerojet Rocketdyne, which is a renowned provider of rocket propulsion system, in 2023. In recent developments, L3Harris completed its 1,000th delivery of both the solid rocket boost motor and Liquid Divert and Attitude Control System for the MDA’s Terminal High Altitude Area Defense system.
LHX has a long-term earnings growth rate of 9.3%. The Zacks Consensus Estimate for L3Harris’ 2024 sales indicates an improvement of 10% from the 2023 reported figure.
RTX Corp. (RTX - Free Report) : Its business unit, Missiles and Defense, is a prominent U.S. missile maker. Its portfolio includes the AIM-9X Sidewinder missile, the AIM-9X Block II missile, RAM-guided missile weapon system. In August 2024, the company won a $478 million contract from the NATO Support and Procurement Agency to supply additional GEM-T missiles to Germany.
RTX boasts a long-term earnings growth rate of 10.4%. The Zacks Consensus Estimate for its 2024 sales indicates an improvement of 7% from the 2023 reported figure.
Price Movement of LMT
In the past year, shares of Lockheed Martin have risen 29.1% against the industry’s 0.2% decline.
Image: Bigstock
Lockheed Wins a $3.4B Deal for Guided Multiple Launch Rocket System
Lockheed Martin Corp. (LMT - Free Report) recently clinched a modification contract for the Guided Multiple Launch Rocket System (GMLRS). The U.S. Army Contracting Command, Redstone Arsenal, AL, has provided the award.
Valued at $3.43 billion, the contract is projected to be completed by Oct. 20, 2027.
What’s Favoring LMT Stock?
Spending on defense products has increased manifold in the last decade as frequent cross-border conflicts along with civil unrest in different countries have instilled fear among nations across the globe. With missile strength constituting a key element of a nation’s defense backbone, the demand for more technologically advanced and lethal missiles has been rising lately. Lockheed, being a prominent missile manufacturer, has been witnessing a solid inflow of contracts from the Pentagon and other U.S. allies involving the design, build and upgrade of its combat-proven missiles. The latest contract win is a bright example of that.
Notably, LMT’s MLRS family of munitions includes a variety of precision-strike rockets and missiles, with ongoing evolutionary development to meet the needs of today’s warfighter. These are fired from both the MLRS M270 family of launchers and the HIMARS launchers.
In particular, GMLRS fires surface-to-surface rockets and has been highly effective in recent combat operations. The fact that Lockheed has manufactured more than 60,000 GMLRS rockets to date reflects the solid demand that this product enjoys in the global defense space.
LMT’s Growth Prospects
Increasingly violent conflicts witnessed in the past few years in different parts of the world have led to rapid deterioration in global peacefulness, thereby setting the stage for more nations to invest heftily in defense products. This should bode well for the missile market, as nations worldwide strive to protect their borders from unprecedented attacks.
A notable surge in global demand and supply must have prompted Mordor Intelligence to project a CAGR of 5% for the missile and missile defense systems market in the 2024-2029 period.
Such a solid market growth projection should benefit Lockheed, considering its proven proficiency in missile manufacturing. The company’s Missiles and Fire Control unit provides a handful of combat-proven air and missile defense systems as well as tactical missiles, apart from MLRS. These include Joint Air-to-Surface Standoff Missile, Long Range Anti-Ship Missile and a few more missile programs.
Opportunities for Peers
Apart from LMT, other prominent defense contractors that stand to benefit from the expanding missile and missile defense systems market are as follows:
Northrop Grumman (NOC - Free Report) : Northrop is a prominent developer of missile systems and counter systems, including strategic deterrents, subsystems and components. On Aug. 27, 2024, the company announced that it is redesigning the Intercontinental Ballistic Missile target vehicle for the Missile Defense Agency (MDA).
NOC boasts a long-term earnings growth rate of 8.7%. The Zacks Consensus Estimate for Northrop’s 2024 sales indicates an improvement of 5.4% from the 2023 reported figure.
L3Harris Technologies (LHX - Free Report) : The company produces the solid propellant rocket motor for the GMLRS. To further strengthen its footprint in the missile market, L3Harris acquired Aerojet Rocketdyne, which is a renowned provider of rocket propulsion system, in 2023. In recent developments, L3Harris completed its 1,000th delivery of both the solid rocket boost motor and Liquid Divert and Attitude Control System for the MDA’s Terminal High Altitude Area Defense system.
LHX has a long-term earnings growth rate of 9.3%. The Zacks Consensus Estimate for L3Harris’ 2024 sales indicates an improvement of 10% from the 2023 reported figure.
RTX Corp. (RTX - Free Report) : Its business unit, Missiles and Defense, is a prominent U.S. missile maker. Its portfolio includes the AIM-9X Sidewinder missile, the AIM-9X Block II missile, RAM-guided missile weapon system. In August 2024, the company won a $478 million contract from the NATO Support and Procurement Agency to supply additional GEM-T missiles to Germany.
RTX boasts a long-term earnings growth rate of 10.4%. The Zacks Consensus Estimate for its 2024 sales indicates an improvement of 7% from the 2023 reported figure.
Price Movement of LMT
In the past year, shares of Lockheed Martin have risen 29.1% against the industry’s 0.2% decline.
Zacks Rank
Lockheed Martin currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.