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Lockheed Secures a Contract to Support CH-53K Helicopter Program
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Lockheed Martin Corp.’s (LMT - Free Report) business unit, Sikorsky Aircraft, recently secured a contract to support its CH-53K helicopter program.
The award has been provided by the Naval Supply Systems Command Weapon Systems Support, Philadelphia, PA.
Details of the Deal
Valued at $20.1 million, the contract is projected to be completed by September 2027. Per the terms of the deal, Lockheed will procure spare parts like 20 valve selectors, 31 lower swivels, 25 aircraft mechanical actuators, 12 mechanical actuators and a few more for the CH-53K helicopters.
Work related to this contract will be carried out in Stratford, CT.
What’s Favoring LMT Stock?
As countries worldwide enhance their defense capabilities, spending on advanced military arms and ammunition is rapidly increasing. This includes growing investments in military helicopters, which are crucial for air warfare missions. Lockheed, as a prominent manufacturer of combat helicopters, thus wins a steady flow of orders from the Pentagon and other U.S. allies. The latest contract win is a bright example of that.
Notably, LMT’s CH-53K King Stallion builds on Sikorsky’s legacy, following the success of earlier models such as the CH-53A, CH-53D/G and CH-53E. Designed for modern combat and shipboard operations, the CH-53K is intelligent, reliable, low-maintenance and highly survivable in harsh environments. With more than 1,200 test flight hours, the helicopter achieved milestones in 2018, including operating at high altitudes, extreme temperatures and low visibility.
These capabilities have likely driven this rotorcraft’s demand in recent times and should lead to more contract awards for Lockheed in the days ahead. Such order flows are expected to boost the company’s revenues, solidifying its position as a leader in military aviation.
Growth Prospects for LMT Stock
Rising military conflicts, terrorism and border disputes, along with rapid technological advancements of military helicopters, have led nations to increase defense spending, particularly on combat-proven helicopters to enhance aerial security. This might have prompted the Mordor Intelligence firm to forecast a compound annual growth rate (CAGR) of more than 2.9% for the military helicopter market from 2024 to 2030.
Such solid market prospects offer growth opportunities for Lockheed. Notably, the company’s portfolio includes well-established helicopters like the Black Hawk, MH-60R Seahawk, CH-148 Cyclone and the CH-53K King Stallion.
Opportunities for LMT’s Peers
Other defense companies that are expected to enjoy the perks of the expanding military helicopter 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 6.9% 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 34.7% compared with the industry’s growth of 3.5%.
Image: Bigstock
Lockheed Secures a Contract to Support CH-53K Helicopter Program
Lockheed Martin Corp.’s (LMT - Free Report) business unit, Sikorsky Aircraft, recently secured a contract to support its CH-53K helicopter program.
The award has been provided by the Naval Supply Systems Command Weapon Systems Support, Philadelphia, PA.
Details of the Deal
Valued at $20.1 million, the contract is projected to be completed by September 2027. Per the terms of the deal, Lockheed will procure spare parts like 20 valve selectors, 31 lower swivels, 25 aircraft mechanical actuators, 12 mechanical actuators and a few more for the CH-53K helicopters.
Work related to this contract will be carried out in Stratford, CT.
What’s Favoring LMT Stock?
As countries worldwide enhance their defense capabilities, spending on advanced military arms and ammunition is rapidly increasing. This includes growing investments in military helicopters, which are crucial for air warfare missions. Lockheed, as a prominent manufacturer of combat helicopters, thus wins a steady flow of orders from the Pentagon and other U.S. allies. The latest contract win is a bright example of that.
Notably, LMT’s CH-53K King Stallion builds on Sikorsky’s legacy, following the success of earlier models such as the CH-53A, CH-53D/G and CH-53E. Designed for modern combat and shipboard operations, the CH-53K is intelligent, reliable, low-maintenance and highly survivable in harsh environments. With more than 1,200 test flight hours, the helicopter achieved milestones in 2018, including operating at high altitudes, extreme temperatures and low visibility.
These capabilities have likely driven this rotorcraft’s demand in recent times and should lead to more contract awards for Lockheed in the days ahead. Such order flows are expected to boost the company’s revenues, solidifying its position as a leader in military aviation.
Growth Prospects for LMT Stock
Rising military conflicts, terrorism and border disputes, along with rapid technological advancements of military helicopters, have led nations to increase defense spending, particularly on combat-proven helicopters to enhance aerial security. This might have prompted the Mordor Intelligence firm to forecast a compound annual growth rate (CAGR) of more than 2.9% for the military helicopter market from 2024 to 2030.
Such solid market prospects offer growth opportunities for Lockheed. Notably, the company’s portfolio includes well-established helicopters like the Black Hawk, MH-60R Seahawk, CH-148 Cyclone and the CH-53K King Stallion.
Opportunities for LMT’s Peers
Other defense companies that are expected to enjoy the perks of the expanding military helicopter 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 6.9% 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 34.7% compared with the industry’s growth of 3.5%.
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.