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Boeing Wins $26.7M Deal to Support Trident II D5 Missile

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The Boeing Company (BA - Free Report) secured maintenance and rebuilding contract for providing technical services to support the U.S. and the U.K. Trident II (D5) missile. Work related to the deal is expected to be completed by Sep 30, 2020.

The contract, valued at $26.7 million, was awarded by Strategic Systems Programs, Washington, District of Columbia. A large portion of the contracted work will be performed in Huntington Beach, CA and the rest in Heath, OH.

A Brief Note on Trident II (D5)

The Trident II is 13.41m long missile and weighs 130,000 lbs. The missile can carry multiple independently targeted re-entry bodies for a maximum range of more than 7,360 km. The Trident II D5 is the latest generation of the U.S. Navy's submarine-launched fleet ballistic missiles, following the highly successful Polaris, Poseidon and Trident I C4 programs.

What’s Favoring Boeing?

Boeing is one of the largest aerospace and defense contractors. Its revenue exposure is spread across more than 90 countries around the globe. Boeing is also one of the major players in the defense space and has defense backlog worth $52 million as of Jun 30, 2018.

The company’s Defense, Space & Security business segment manufactures as well as develops various defense-related products like manned and unmanned military aircraft and weapons systems including missile systems. The company’s Strategic Deterrence Systems integrates to support the land-based leg of America’s nuclear deterrence triad, the Minuteman intercontinental ballistic missile (ICBM) as well as sustains vital navigational and control systems across the triad.

Per Markets and Markets, rocket and missile market is expected to reach $70 billion during 2017-2022, at a CAGR of 4.74%.

Moreover, the fiscal 2019 defense budget has authorized the United States to spend $717 billion on defense, up 5%. This will further increase the flow of orders for Boeing. Other companies like Lockheed Martin Corp (LMT - Free Report) , Northrop Grumman Corp (NOC - Free Report) and Huntington Ingalls Industries, Inc (HII - Free Report) are also expected to gain from this budget revision.

Price Performance

Boeing’s shares have surged about 51.1% in the past 12 months compared with the industry’s rally of 24.3%.

 

 

Zacks Rank

Boeing 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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