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Boeing Secures Navy Contract to Upgrade the EA-18G Growler Jet

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The Boeing Company (BA - Free Report) has been awarded a $95.8 million contract to provide testing and installation support for the Block II Phase One upgrade for the EA-18G Growler jet, called the Next Generation Electronic Attack Unit, for the U.S. Navy. It includes both developmental and operational testing as well as the production of aircraft systems like avionics and airframe materials.

Details of the Deal

As part of the agreement, Boeing will also produce and deliver 25 NGEAU A-Kits, 25 Gunbay Pallet A-Kits, 15 NGEAU B-Kits, and nine spare B-Kits. The work will be carried out at Boeing’s facility in St. Louis, MO, Minneapolis, MN; Bethpage, NY; and Linthicum, MD.
 
The award has been provided by the Naval Air Systems Command, Patuxent River, MD. The deal is expected to be completed by April 2028.

What’s Favoring BA?

With countries worldwide enhancing their defense capabilities, spending on advanced military arms and ammunition has been rapidly increasing. This also includes fighter jets, which are crucial for air warfare missions. This trend has been benefiting Boeing, a renowned manufacturer of combat aircraft, in the form of a steady flow of orders from the Pentagon and U.S. allies.

Boeing’s EA-18G Growler is one of the most advanced electronic attack aircraft, delivering next-generation capabilities for mission readiness.  Equipped with cutting-edge jamming systems and advanced sensors, it excels at disrupting enemy radar and communications. The Growler is also capable of securely connecting and sharing information across various domains, including air, land, sea, space and cyber, making it a critical asset in modern warfare.

Such notable features of the EA-18G Growler are likely to have been boosting its demand, which is further evident from the latest contract win.

Growth Prospects for BA

Rising military conflicts, terrorism and border disputes, along with rapid technological advancements in combat jets, have led nations to increase their defense spending on combat-proven jets, which constitute an integral part of their defense structure.
 
This is likely to have prompted Mordor Intelligence to forecast a compound annual growth rate of 3.7% for the global fighter aircraft market during the 2024-2029 time period.

Such solid market prospects offer growth opportunities for Boeing. Notably, its portfolio includes well-established combat jets like the F/A- Super Hornet, F-15EX and T-7A Red Hawk, in addition to the EA-18G Growler.

Opportunities for BA’s Peers

Other aerospace companies that are likely to benefit from the expanding global fighter aircraft market are discussed below.

Northrop Grumman Corporation (NOC - Free Report) : It is a leading provider of manned and unmanned air systems. It builds some of the world’s most advanced aircraft like the E-2C Hawkeye 2000, A-10 Thunderbolt II, F-5 Tiger Fighter Jet and many more.

Northrop has a long-term (three to five years) earnings growth rate of 8.7%. The Zacks Consensus Estimate for NOC’s 2024 sales indicates year-over-year growth of 5.4%.

Embraer (ERJ - Free Report) : The company offers a comprehensive portfolio of the most advanced aircraft in the combat market, which includes the A-29 Super Tucano light attack and advanced trainer and the C-390 Millennium military multi-mission aircraft.

The Zacks Consensus Estimate for ERJ’s 2024 sales indicates year-over-year growth of 19.1%. The consensus estimate for 2024 earnings per share indicates year-over-year growth of 262.8%.

Lockheed Martin Corporation (LMT - Free Report) is the manufacturer of some of the most advanced military jets in the world. Its key jet programs include the F-35 Lightning II, F-22 Raptor, F-16 Fighting Falcon and C-130 Hercules.

Lockheed Martin has a long-term earnings growth rate of 4.7%. The Zacks Consensus Estimate for LMT’s 2024 sales indicates year-over-year growth of 5.3%.

BA Stock’s Price Movement

Shares of BA have lost 16.6% in the past three months against the industry’s 9.8% growth.

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BA’s Zacks Rank

BA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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