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Lockheed (LMT) Wins $261M Contract to Aid Missile Production
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Lockheed Martin Corp.’s (LMT - Free Report) Space business segment recently clinched a modification contract involving missile production. The award has been offered by the Strategic Systems Programs, Washington, D.C.
Details of the Deal
Valued at $260.8 million, the contract is projected to be completed by Nov 9, 2026. Per the terms of the deal, Lockheed will provide program management, engineering development, systems integration, long lead material, and special tooling and equipment to support missile production.
A major portion of the work related to this deal will be carried out in Denver, Co and Sunnyvale, CA.
What’s Favoring Lockheed Martin?
Increasing geopolitical and socioeconomic turmoil worldwide has prompted nations, both developed and developing, to expand their respective military arsenal with missiles constituting a significant portion of that inventory.
Notably, Lockheed’s Space business unit, apart from developing satellites and space transportation system, also builds strike missile systems. Its major programs include Trident II D5 Fleet Ballistic Missile (FBM), a program with the U.S. Navy for the only submarine-launched intercontinental ballistic missile currently in production in the United States. This missile cannot be tracked during operation as it has a sea-based deterrent.
As one of the major missile makers in the United States and with such a remarkable missile in its product portfolio, Lockheed Martin enjoys a strong demand base in the missile defense market. The latest contract win is a bright example of that.
Growth Prospects
Per a report from Mordor Intelligence, the missiles and missile defense system market is anticipated to witness a CAGR of 4.9% during the 2022-2027 period. Such an expanding market is likely to benefit LMT as it enjoys a solid position in the military missile market. Prominent defense majors that have been manufacturing missiles for the defense industry and are likely to enjoy the perks of increased demand are as follows:
Northrop Grumman (NOC - Free Report) is a prominent developer of missile systems and counter systems, including strategic deterrents, subsystems and components. To strengthen its position in the missile market, Northrop acquired Orbital ATK in 2018, which used to be one of the industry leaders in providing missile components across air, sea and land-based systems.
Northrop Grumman has a long-term earnings growth rate of 3.3%. NOC’s investors have gained 23.2% in the past year.
Raytheon Technologies’ (RTX - Free Report) Missiles & Defense is a leading designer, developer, integrator, producer and sustainer of integrated air and missile defense systems. The unit serves as a prime contractor or major subcontractor on numerous missiles and related programs with the U.S. Department of Defense.
Raytheon’s long-term earnings growth rate is pegged at 9.5%. Shares of RTX have returned 11% value to its investors in the past year.
General Dynamics’ (GD - Free Report) Ordnance and Tactical Systems is the system integrator of the 2.75-inch Hydra-70 family of rockets. It also produces composite rocket motor cases and launches tubes for tactical and strategic missiles.
General Dynamics boasts a long-term earnings growth rate of 9.3%. GD shares have returned 16.4% in the past year.
Price Movement
In the past year, shares of Lockheed Martin have rallied 26.4% against the industry’s decline of 3.5%.
Image Source: Zacks Investment Research
Zacks Rank
Lockheed Martin currently carries a Zacks Rank #4 (Sell).
Image: Bigstock
Lockheed (LMT) Wins $261M Contract to Aid Missile Production
Lockheed Martin Corp.’s (LMT - Free Report) Space business segment recently clinched a modification contract involving missile production. The award has been offered by the Strategic Systems Programs, Washington, D.C.
Details of the Deal
Valued at $260.8 million, the contract is projected to be completed by Nov 9, 2026. Per the terms of the deal, Lockheed will provide program management, engineering development, systems integration, long lead material, and special tooling and equipment to support missile production.
A major portion of the work related to this deal will be carried out in Denver, Co and Sunnyvale, CA.
What’s Favoring Lockheed Martin?
Increasing geopolitical and socioeconomic turmoil worldwide has prompted nations, both developed and developing, to expand their respective military arsenal with missiles constituting a significant portion of that inventory.
Notably, Lockheed’s Space business unit, apart from developing satellites and space transportation system, also builds strike missile systems. Its major programs include Trident II D5 Fleet Ballistic Missile (FBM), a program with the U.S. Navy for the only submarine-launched intercontinental ballistic missile currently in production in the United States. This missile cannot be tracked during operation as it has a sea-based deterrent.
As one of the major missile makers in the United States and with such a remarkable missile in its product portfolio, Lockheed Martin enjoys a strong demand base in the missile defense market. The latest contract win is a bright example of that.
Growth Prospects
Per a report from Mordor Intelligence, the missiles and missile defense system market is anticipated to witness a CAGR of 4.9% during the 2022-2027 period. Such an expanding market is likely to benefit LMT as it enjoys a solid position in the military missile market. Prominent defense majors that have been manufacturing missiles for the defense industry and are likely to enjoy the perks of increased demand are as follows:
Northrop Grumman (NOC - Free Report) is a prominent developer of missile systems and counter systems, including strategic deterrents, subsystems and components. To strengthen its position in the missile market, Northrop acquired Orbital ATK in 2018, which used to be one of the industry leaders in providing missile components across air, sea and land-based systems.
Northrop Grumman has a long-term earnings growth rate of 3.3%. NOC’s investors have gained 23.2% in the past year.
Raytheon Technologies’ (RTX - Free Report) Missiles & Defense is a leading designer, developer, integrator, producer and sustainer of integrated air and missile defense systems. The unit serves as a prime contractor or major subcontractor on numerous missiles and related programs with the U.S. Department of Defense.
Raytheon’s long-term earnings growth rate is pegged at 9.5%. Shares of RTX have returned 11% value to its investors in the past year.
General Dynamics’ (GD - Free Report) Ordnance and Tactical Systems is the system integrator of the 2.75-inch Hydra-70 family of rockets. It also produces composite rocket motor cases and launches tubes for tactical and strategic missiles.
General Dynamics boasts a long-term earnings growth rate of 9.3%. GD shares have returned 16.4% in the past year.
Price Movement
In the past year, shares of Lockheed Martin have rallied 26.4% against the industry’s decline of 3.5%.
Image Source: Zacks Investment Research
Zacks Rank
Lockheed Martin currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.