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Lockheed (LMT) Wins $677M Deal to Support Combat Helicopters
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Lockheed Martin Corp.’s (LMT - Free Report) business unit, Sikorsky, recently clinched a contract involving CH-53E and MH-53E helicopters. The award has been provided by the Naval Supply Systems Command Weapon Systems Support, Philadelphia, PA.
Details of the Deal
Valued at $676.7 million, the contract is expected to be completed by December 2027. The agreement includes one two-year option, which, if exercised, will bring the value of the contract to $752.3 million and the completion date to December 2029.
Per the terms of the deal, Sikorsky will offer supply chain management that includes 196 weapon replaceable assemblies/shop replaceable assemblies for supporting the CH-53E and MH-53E helicopters.
The majority of work related to this deal will be executed in Cherry Point, NC.
What’s Favoring Lockheed Martin?
In recent times, U.S. military helicopters have gained prominence and significant traction due to advancements and integration of new tactical, logistical and other important features. Some of these developments can be attributed to Lockheed Martin that paved the way for the company to secure valuable helicopter-related contracts in recent times. The latest contract win is a bright example of that.
With the fiscal 2023 defense budget offering investment potential worth $56.5 billion in aircraft, we expect Lockheed Martin’s Rotary and Mission Systems (RMS) business segment, which comprises the Sikorsky helicopters, to benefit.
Helicopter Market Prospects
The global attack helicopter market is estimated to witness a CAGR of more than 4% during the 2020-2025 period, per the latest forecast made by market research firm, Mordor Intelligence. This indicates solid opportunities for renowned combat helicopter manufacturers like Lockheed Martin, Textron (TXT - Free Report) , Airbus (EADSY - Free Report) and Boeing (BA - Free Report) .
Textron’s business unit, Textron Aviation Defense designs, builds and supports versatile and globally known military aircraft preferred for training and attack missions. Some of Textron’s renowned products include Beechcraft T-6C trainer and AT-6 Wolverine.
TXT stock boasts a long-term earnings growth rate of 12.5%. The Zacks Consensus Estimate for 2022 sales implies growth of 4.1% from the 2021 reported figure.
Airbus is one of the world's largest suppliers of advanced military helicopters. Its product portfolio includes the H135 combat helicopter, H145M helicopter, AS565 MBe, H160M, H175M, H215M, H225M and a few more.
EADSY boasts a long-term earnings growth rate of 12.4%. The stock has gained 30.2% in the past three months.
Boeing Defense, Space & Security segment’s primary products include fixed-wing military aircraft, F/A-18E/F Super Hornet, F-15 programs, P-8 programs, KC-46A Tanker, and T-7A Red Hawk. This segment also produces rotorcraft and rotary-wing programs such as CH-47 Chinook, AH-64 Apache and V-22 Osprey.
BA stock boasts a long-term earnings growth rate of 4%. The Zacks Consensus Estimate for 2022 sales implies growth of 6% from the 2021 reported figure.
Price Movement
In the past year, shares of Lockheed have gained 41.6% against the industry’s 3.6% decline.
Image: Bigstock
Lockheed (LMT) Wins $677M Deal to Support Combat Helicopters
Lockheed Martin Corp.’s (LMT - Free Report) business unit, Sikorsky, recently clinched a contract involving CH-53E and MH-53E helicopters. The award has been provided by the Naval Supply Systems Command Weapon Systems Support, Philadelphia, PA.
Details of the Deal
Valued at $676.7 million, the contract is expected to be completed by December 2027. The agreement includes one two-year option, which, if exercised, will bring the value of the contract to $752.3 million and the completion date to December 2029.
Per the terms of the deal, Sikorsky will offer supply chain management that includes 196 weapon replaceable assemblies/shop replaceable assemblies for supporting the CH-53E and MH-53E helicopters.
The majority of work related to this deal will be executed in Cherry Point, NC.
What’s Favoring Lockheed Martin?
In recent times, U.S. military helicopters have gained prominence and significant traction due to advancements and integration of new tactical, logistical and other important features. Some of these developments can be attributed to Lockheed Martin that paved the way for the company to secure valuable helicopter-related contracts in recent times. The latest contract win is a bright example of that.
With the fiscal 2023 defense budget offering investment potential worth $56.5 billion in aircraft, we expect Lockheed Martin’s Rotary and Mission Systems (RMS) business segment, which comprises the Sikorsky helicopters, to benefit.
Helicopter Market Prospects
The global attack helicopter market is estimated to witness a CAGR of more than 4% during the 2020-2025 period, per the latest forecast made by market research firm, Mordor Intelligence. This indicates solid opportunities for renowned combat helicopter manufacturers like Lockheed Martin, Textron (TXT - Free Report) , Airbus (EADSY - Free Report) and Boeing (BA - Free Report) .
Textron’s business unit, Textron Aviation Defense designs, builds and supports versatile and globally known military aircraft preferred for training and attack missions. Some of Textron’s renowned products include Beechcraft T-6C trainer and AT-6 Wolverine.
TXT stock boasts a long-term earnings growth rate of 12.5%. The Zacks Consensus Estimate for 2022 sales implies growth of 4.1% from the 2021 reported figure.
Airbus is one of the world's largest suppliers of advanced military helicopters. Its product portfolio includes the H135 combat helicopter, H145M helicopter, AS565 MBe, H160M, H175M, H215M, H225M and a few more.
EADSY boasts a long-term earnings growth rate of 12.4%. The stock has gained 30.2% in the past three months.
Boeing Defense, Space & Security segment’s primary products include fixed-wing military aircraft, F/A-18E/F Super Hornet, F-15 programs, P-8 programs, KC-46A Tanker, and T-7A Red Hawk. This segment also produces rotorcraft and rotary-wing programs such as CH-47 Chinook, AH-64 Apache and V-22 Osprey.
BA stock boasts a long-term earnings growth rate of 4%. The Zacks Consensus Estimate for 2022 sales implies growth of 6% from the 2021 reported figure.
Price Movement
In the past year, shares of Lockheed have gained 41.6% against the industry’s 3.6% decline.
Image Source: Zacks Investment Research
Zacks Rank
Lockheed Martin currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.