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Lockheed Secures a Navy Contract to Aid CH-53K Helicopter Program
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Lockheed Martin Corp.’s (LMT - Free Report) business unit, Sikorsky Aircraft, recently clinched a contract involving its CH-53K helicopter. The award has been provided by the Naval Supply Systems Command Weapon Systems Support, Philadelphia, PA.
Details of the Deal
Valued at $38.9 million, the contract is projected to be completed by December 2028. Per the terms of the deal, Lockheed will procure various parts, including six probes, 28 center cargo hooks, 29 machine bolts, 11 helicopter underslung sling hooks, 32 air heat exchangers, 23 communication systems and a few more, to support CH-53K helicopters.
Work related to this contract will be executed in Stratford, CT.
What’s Favoring LMT Stock?
The CH-53K King Stallion builds on Sikorsky’s five decades of success with earlier models like the CH-53A, CH-53D/G and CH-53E. Engineered for modern warfare, including shipboard operations, the CH-53K is designed to be intelligent, reliable, low maintenance and highly survivable in harsh, remote environments.
Having accumulated more than 1,200 test flight hours, the helicopter has attained certain milestones in 2018, such as performing in high altitudes, extreme heat and degraded visual conditions.
These advanced capabilities must have been driving demand for the CH-53K helicopter, leading to increased contract awards for Lockheed, like the latest one. Such order flows are expected to boost LMT’s revenues in the coming quarters, reinforcing its dominance in military aviation.
Growth Prospects of LMT Stock
Lately, military helicopters have gained significant traction due to advancements in tactical, logistical and other key features. Lockheed has played a crucial role in this progress by bringing in state-of-the-art, lethal, combat-proven helicopters into the market for warfare. Impressively, its Black Hawk helicopter serves the armed forces of 34 countries, other than the U.S. military.
The rise in geopolitical tensions and cross-border conflicts across the globe has caused nations to increase their defense spending, particularly on new aircraft and helicopters, to strengthen their aerial security. This might have prompted the Mordor Intelligence firm to project a compound annual growth rate (CAGR) of more than 4% for the military rotorcraft market during 2024-2029.
Such a solid growth projection is expected to boost Lockheed, which holds a leading position in the military helicopter market with a portfolio that includes the Seahawk, Raider-X, CH-148 and a few more helicopters. This should position the company for continued growth in the coming years.
Opportunities for LMT’s Peers
Other defense companies that are expected to enjoy the perks of the expanding military rotorcraft market have been discussed below.
The Boeing Company (BA - Free Report) : Its military rotorcraft serves the U.S. Army, Navy, Marines and Air Force and allied defense forces in more than 20 countries across the globe. Boeing’s Defense, Space & Security segment produces rotorcraft and rotary-wing programs, such as H-47 Chinook, AH-64 Apache, AH-6 Little Bird and V-22 Osprey.
The company has a long-term (three to five years) earnings growth rate of 21.3%. The Zacks Consensus Estimate for BA’s third-quarter 2024 sales indicates an improvement of 10.8% from the prior-year quarter’s reported figure.
Airbus Group (EADSY - Free Report) : It is one of the world's largest suppliers of advanced military helicopters. EADSY’s product portfolio includes the H135 combat helicopter, the H145M helicopter, AS565 MBe, H160M, H175M, H215M, H225M and a few more.
The company’s long-term earnings growth rate is 13.9%. The Zacks Consensus Estimate for EADSY’s 2024 sales indicates an improvement of 7.2% from the 2023 reported figure.
Textron (TXT - Free Report) : Its business unit, Textron Aviation Defense, designs, builds and supports versatile and globally known military helicopters, preferred for training and attack missions. Some of Textron’s renowned products are the Beechcraft T-6C trainer and the AT-6 Wolverine.
TXT boasts a long-term earnings growth rate of 10.1%. The consensus estimate for TXT’s 2024 sales indicates an improvement of 5.6% from the 2023 reported figure.
Price Movement
In the past year, shares of Lockheed have risen 33.5% compared with the industry’s growth of 2.6%.
Image: Bigstock
Lockheed Secures a Navy Contract to Aid CH-53K Helicopter Program
Lockheed Martin Corp.’s (LMT - Free Report) business unit, Sikorsky Aircraft, recently clinched a contract involving its CH-53K helicopter. The award has been provided by the Naval Supply Systems Command Weapon Systems Support, Philadelphia, PA.
Details of the Deal
Valued at $38.9 million, the contract is projected to be completed by December 2028. Per the terms of the deal, Lockheed will procure various parts, including six probes, 28 center cargo hooks, 29 machine bolts, 11 helicopter underslung sling hooks, 32 air heat exchangers, 23 communication systems and a few more, to support CH-53K helicopters.
Work related to this contract will be executed in Stratford, CT.
What’s Favoring LMT Stock?
The CH-53K King Stallion builds on Sikorsky’s five decades of success with earlier models like the CH-53A, CH-53D/G and CH-53E. Engineered for modern warfare, including shipboard operations, the CH-53K is designed to be intelligent, reliable, low maintenance and highly survivable in harsh, remote environments.
Having accumulated more than 1,200 test flight hours, the helicopter has attained certain milestones in 2018, such as performing in high altitudes, extreme heat and degraded visual conditions.
These advanced capabilities must have been driving demand for the CH-53K helicopter, leading to increased contract awards for Lockheed, like the latest one. Such order flows are expected to boost LMT’s revenues in the coming quarters, reinforcing its dominance in military aviation.
Growth Prospects of LMT Stock
Lately, military helicopters have gained significant traction due to advancements in tactical, logistical and other key features. Lockheed has played a crucial role in this progress by bringing in state-of-the-art, lethal, combat-proven helicopters into the market for warfare. Impressively, its Black Hawk helicopter serves the armed forces of 34 countries, other than the U.S. military.
The rise in geopolitical tensions and cross-border conflicts across the globe has caused nations to increase their defense spending, particularly on new aircraft and helicopters, to strengthen their aerial security. This might have prompted the Mordor Intelligence firm to project a compound annual growth rate (CAGR) of more than 4% for the military rotorcraft market during 2024-2029.
Such a solid growth projection is expected to boost Lockheed, which holds a leading position in the military helicopter market with a portfolio that includes the Seahawk, Raider-X, CH-148 and a few more helicopters. This should position the company for continued growth in the coming years.
Opportunities for LMT’s Peers
Other defense companies that are expected to enjoy the perks of the expanding military rotorcraft market have been discussed below.
The Boeing Company (BA - Free Report) : Its military rotorcraft serves the U.S. Army, Navy, Marines and Air Force and allied defense forces in more than 20 countries across the globe. Boeing’s Defense, Space & Security segment produces rotorcraft and rotary-wing programs, such as H-47 Chinook, AH-64 Apache, AH-6 Little Bird and V-22 Osprey.
The company has a long-term (three to five years) earnings growth rate of 21.3%. The Zacks Consensus Estimate for BA’s third-quarter 2024 sales indicates an improvement of 10.8% from the prior-year quarter’s reported figure.
Airbus Group (EADSY - Free Report) : It is one of the world's largest suppliers of advanced military helicopters. EADSY’s product portfolio includes the H135 combat helicopter, the H145M helicopter, AS565 MBe, H160M, H175M, H215M, H225M and a few more.
The company’s long-term earnings growth rate is 13.9%. The Zacks Consensus Estimate for EADSY’s 2024 sales indicates an improvement of 7.2% from the 2023 reported figure.
Textron (TXT - Free Report) : Its business unit, Textron Aviation Defense, designs, builds and supports versatile and globally known military helicopters, preferred for training and attack missions. Some of Textron’s renowned products are the Beechcraft T-6C trainer and the AT-6 Wolverine.
TXT boasts a long-term earnings growth rate of 10.1%. The consensus estimate for TXT’s 2024 sales indicates an improvement of 5.6% from the 2023 reported figure.
Price Movement
In the past year, shares of Lockheed have risen 33.5% compared with the industry’s growth of 2.6%.
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.