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Boeing (BA) Wins $500M Deal to Support Qatar's F-15 Program

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The Boeing Company (BA - Free Report) recently secured a contract for providing F-15QA aircrew and maintenance training to support the Qatar Emiri Air Force (QAEF). Work related to the deal is scheduled to be completed by August 2026.

Valued at $500 million, the contract was awarded by the Air Force Installation Contracting Agency/338th Specialized Contracting Squadron, Joint Base San Antonio-Randolph, TX. The entire task will be carried out in St. Louis, Missouri.

A Brief Note on F-15

Boeing’s F-15 Strike Eagle is a twin-engine, all-weather tactical fighter aircraft. Its proven design is unbeatable in air-to-air combat, with more than 100 aerial combat victories.

What’s Favoring Boeing?

With rising security threats across the globe, the developing economies like India, Qatar and a few more along with the developed nations like the United States and Europe are ramping up their arsenal. Being the largest jet maker, Boeing thus enjoys a smooth flow of contracts for military jets and associated training services. The latest contract win is a bright example to the same.

These contract wins are providing a significant boost to the company’s defense business. Evidently, in second-quarter 2019, revenues at its defense segment — Boeing Defense, Space & Security (BDS) — increased a solid 8% year over year to $6.61 billion.

Notably, the U.S. government’s fiscal 2020 defense budget includes a spending provision of $57.7 billion on aircraft, a massive increase of 166% from the approved fiscal 2019 defense expenditure plan. As Boeing’s key forte has been combat-proven aircraft, it has higher chances of winning military-jet related contracts from the Pentagon like the latest one.

Price Movement

In a year’s time, shares of Boeing have gained about 3.8% compared with the industry’s 7.6% rise.

Zacks Rank & Key Picks    

Boeing currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the same space are Wesco Aircraft Holdings , General Dynamics Corp. (GD - Free Report) and Northrop Grumman Corp. (NOC - Free Report) ), each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Wesco Aircraft’s long-term growth estimates currently stand at 12%. The Zacks Consensus Estimate for 2019 earnings has increased 1.2% to 85 cents over the past 60 days.

General Dynamics’ long-term growth estimates currently stand at 8.7%. The Zacks Consensus Estimate for 2019 earnings has moved 0.9% up to $11.86 over the past 90 days.

Northrop Grumman’s long-term growth estimates currently stand at 12.40%. The Zacks Consensus Estimate for 2019 earnings has climbed 1.8% to $19.63 over the past 90 days.

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