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Lockheed (LMT) Wins $2.77B Deal for CH-53K Aircraft Production
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Lockheed Martin Corp.’s (LMT - Free Report) arm, Sikorsky, recently clinched a modification contract that expands the scope of the Lot 7 and 8 block buy contracts to include an additional 35 CH-53K full-rate production aircraft. The contract will serve the Marine Corps with 27 aircraft and the government of Israel with eight aircraft.
Valued at $2.77 billion, the contract also highlights aircraft and programmatic support as well as logistical support and spare services by LMT for the stealth helicopter.
The deal has been awarded by the Naval Air Systems Command, Patuxent River, MD. The contract is expected to be complete by December 2027. The work related to this deal will be carried out at multiple locations across the United States.
What’s Favoring Lockheed Martin?
Military helicopters are witnessing strong demand, mainly due to advancements and the integration of new tactical and logistical features. This tends to boost LMT’s order inflow prospects involving production and modification contracts for helicopters, like the latest one.
Per a report from Mordor Intelligence, the military rotorcraft market is likely to witness a CAGR of more than 4% during the 2022-2027 period. This should benefit Lockheed as the company enjoys a dominant position in the military helicopter market with its portfolio containing programs like e Black Hawk, Seahawk and CH-53K King Stallion heavy-lift helicopters.
This should continue to boost LMT’s revenues from its Rotary and Mission Systems business segment, which comprises Sikorsky helicopters. This is likely to bolster its overall revenue generation prospects.
Peer Prospects
Other defense companies that may enjoy the perks of the expanding military helicopter market are as follows:
Boeing (BA - Free Report) : Its 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.
Boeing has a long-term (three to five years) earnings growth rate of 4%. Its investors have gained 32.1% in the past year.
Airbus Group (EADSY - Free Report) : It is one of the world's largest suppliers of advanced military helicopters. Its product portfolio includes the H135 combat helicopter, the H145M helicopter, AS565 MBe, H160M, H175M, H215M, H225M and a few more.
Airbus’ long-term earnings growth rate is pegged at 12.4%. Shares of EADSY have returned 37% value to its investors in the past year.
Textron (TXT - Free Report) : Its business unit, Textron Aviation Defense, designs, builds and supports versatile and globally known military helicopters, preferred for training and attack missions. Some of Textron’s renowned products include the Beechcraft T-6C trainer and the AT-6 Wolverine.
Textron boasts a long-term earnings growth rate of 11.7%. TXT stock has appreciated 16.5% in the past year.
Price Movement
In the past year, shares of Lockheed Martin have increased 5% against the industry’s fall of 6.7%.
Image: Bigstock
Lockheed (LMT) Wins $2.77B Deal for CH-53K Aircraft Production
Lockheed Martin Corp.’s (LMT - Free Report) arm, Sikorsky, recently clinched a modification contract that expands the scope of the Lot 7 and 8 block buy contracts to include an additional 35 CH-53K full-rate production aircraft. The contract will serve the Marine Corps with 27 aircraft and the government of Israel with eight aircraft.
Valued at $2.77 billion, the contract also highlights aircraft and programmatic support as well as logistical support and spare services by LMT for the stealth helicopter.
The deal has been awarded by the Naval Air Systems Command, Patuxent River, MD. The contract is expected to be complete by December 2027. The work related to this deal will be carried out at multiple locations across the United States.
What’s Favoring Lockheed Martin?
Military helicopters are witnessing strong demand, mainly due to advancements and the integration of new tactical and logistical features. This tends to boost LMT’s order inflow prospects involving production and modification contracts for helicopters, like the latest one.
Per a report from Mordor Intelligence, the military rotorcraft market is likely to witness a CAGR of more than 4% during the 2022-2027 period. This should benefit Lockheed as the company enjoys a dominant position in the military helicopter market with its portfolio containing programs like e Black Hawk, Seahawk and CH-53K King Stallion heavy-lift helicopters.
This should continue to boost LMT’s revenues from its Rotary and Mission Systems business segment, which comprises Sikorsky helicopters. This is likely to bolster its overall revenue generation prospects.
Peer Prospects
Other defense companies that may enjoy the perks of the expanding military helicopter market are as follows:
Boeing (BA - Free Report) : Its 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.
Boeing has a long-term (three to five years) earnings growth rate of 4%. Its investors have gained 32.1% in the past year.
Airbus Group (EADSY - Free Report) : It is one of the world's largest suppliers of advanced military helicopters. Its product portfolio includes the H135 combat helicopter, the H145M helicopter, AS565 MBe, H160M, H175M, H215M, H225M and a few more.
Airbus’ long-term earnings growth rate is pegged at 12.4%. Shares of EADSY have returned 37% value to its investors in the past year.
Textron (TXT - Free Report) : Its business unit, Textron Aviation Defense, designs, builds and supports versatile and globally known military helicopters, preferred for training and attack missions. Some of Textron’s renowned products include the Beechcraft T-6C trainer and the AT-6 Wolverine.
Textron boasts a long-term earnings growth rate of 11.7%. TXT stock has appreciated 16.5% in the past year.
Price Movement
In the past year, shares of Lockheed Martin have increased 5% against the industry’s fall of 6.7%.
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.