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Textron Wins $386M Navy Deal to Manufacture LCAC Vehicles
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Textron Inc. (TXT - Free Report) recently clinched a modification contract for building landing craft air cushion (LCAC) 100 Class Craft. The deal has been awarded by the Naval Sea Systems Command, Washington, D.C. Valued at $386.3 million, the contract is scheduled to be completed by January 2025. The majority of work related to this deal will be executed in New Orleans, LA.
Significance of LCAC
Textron’s next generation LCAC vehicles offer enhanced performance, reliability and “maintainability” and meet the Marine Corps’ requirements for increased payload and availability. It is designed to function in extreme conditions, from Arctic cold to Sahara heat, on missions ranging from transporting cargo to minesweeping. The LCAC is part of the Ship-to-Shore Connector (SSC) program that deals with the functional replacement of the existing fleet of LCAC vehicles, which are nearing the end of their service life.
This program’s mission is to land surface assault elements in support of operational maneuver from the sea at over-the-horizon distances while operating from amphibious ships and mobile landing platforms.
Our View
Textron’s Marine and Land Systems unit develops the U.S. Navy’s next generation LCAC as part of the SSC program. Interestingly, this also is Marine and Land Systems’ primary U.S. government program and LCAC is the cornerstone of the current U.S. amphibious capability. So, no doubt, this program enjoys strong demand in the U.S. defense space, which, in turn, is likely to boost Textron’s top line.
It is imperative to mention here that Marine and Land Systems unit has witnessed top line deceleration recently, owing to lower deliveries for armored vehicles. Now, the latest contract win should enable this unit to rebound and register revenue growth in the coming quarters.
In February 2020, the U.S. President’s budget submission for fiscal 2021 included a proposed investment of $207.1 billion in Navy. This investment is aimed at strengthening the Navy with its battle force set to grow from 293 currently to 306 by the end of fiscal 2021. Such solid investment plan is expected to usher in more contracts, like the latest one, for Textron, with its LCAC being one of the prominent amphibian assault vehicles.
Price Movement
In a year’s time, shares of Textron have lost 48.5% compared with the industry’s 24.1% decline.
Zacks Rank & Other Stocks to Consider
Textron currently carries a Zacks Rank #5 (Strong Sell).
AeroVironment came up with average positive earnings surprise of 5.72% in the last four quarters. The Zacks Consensus Estimate for fiscal 2020 earnings indicates year-over-year improvement of 1.7%.
Huntington Ingalls pulled off positive earnings surprise of 2.83% in the last reported quarter. The Zacks Consensus Estimate for 2020 earnings indicates annual improvement of 44.3%.
Leidos pulled off average positive earnings surprise of 11.19% for the trailing four quarters. The Zacks Consensus Estimate for 2020 earnings indicates annual improvement of 6.2%.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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Textron Wins $386M Navy Deal to Manufacture LCAC Vehicles
Textron Inc. (TXT - Free Report) recently clinched a modification contract for building landing craft air cushion (LCAC) 100 Class Craft. The deal has been awarded by the Naval Sea Systems Command, Washington, D.C.
Valued at $386.3 million, the contract is scheduled to be completed by January 2025. The majority of work related to this deal will be executed in New Orleans, LA.
Significance of LCAC
Textron’s next generation LCAC vehicles offer enhanced performance, reliability and “maintainability” and meet the Marine Corps’ requirements for increased payload and availability. It is designed to function in extreme conditions, from Arctic cold to Sahara heat, on missions ranging from transporting cargo to minesweeping. The LCAC is part of the Ship-to-Shore Connector (SSC) program that deals with the functional replacement of the existing fleet of LCAC vehicles, which are nearing the end of their service life.
This program’s mission is to land surface assault elements in support of operational maneuver from the sea at over-the-horizon distances while operating from amphibious ships and mobile landing platforms.
Our View
Textron’s Marine and Land Systems unit develops the U.S. Navy’s next generation LCAC as part of the SSC program. Interestingly, this also is Marine and Land Systems’ primary U.S. government program and LCAC is the cornerstone of the current U.S. amphibious capability. So, no doubt, this program enjoys strong demand in the U.S. defense space, which, in turn, is likely to boost Textron’s top line.
It is imperative to mention here that Marine and Land Systems unit has witnessed top line deceleration recently, owing to lower deliveries for armored vehicles. Now, the latest contract win should enable this unit to rebound and register revenue growth in the coming quarters.
In February 2020, the U.S. President’s budget submission for fiscal 2021 included a proposed investment of $207.1 billion in Navy. This investment is aimed at strengthening the Navy with its battle force set to grow from 293 currently to 306 by the end of fiscal 2021. Such solid investment plan is expected to usher in more contracts, like the latest one, for Textron, with its LCAC being one of the prominent amphibian assault vehicles.
Price Movement
In a year’s time, shares of Textron have lost 48.5% compared with the industry’s 24.1% decline.
Zacks Rank & Other Stocks to Consider
Textron currently carries a Zacks Rank #5 (Strong Sell).
A few better-ranked stocks in the same sector are AeroVironment, Inc. (AVAV - Free Report) , Huntington Ingalls Industries, Inc. (HII - Free Report) and Leidos Holdings,Inc. (LDOS - Free Report) . While AeroVironment and Huntington Ingalls sport a Zacks Rank #1 (Strong Buy), Leidos holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AeroVironment came up with average positive earnings surprise of 5.72% in the last four quarters. The Zacks Consensus Estimate for fiscal 2020 earnings indicates year-over-year improvement of 1.7%.
Huntington Ingalls pulled off positive earnings surprise of 2.83% in the last reported quarter. The Zacks Consensus Estimate for 2020 earnings indicates annual improvement of 44.3%.
Leidos pulled off average positive earnings surprise of 11.19% for the trailing four quarters. The Zacks Consensus Estimate for 2020 earnings indicates annual improvement of 6.2%.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>