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Boeing (BA) Wins Deal to Aid F/A-18E/F and EA-18G Jet Programs
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The Boeing Company (BA - Free Report) recently clinched a contract involving its F/A-18E/F and EA-18G aircraft. The award was provided by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $94.5 million, the contract is projected to be completed by June 2026. Per the terms of the deal, Boeing will be engaged in the production and delivery of 96 Trailing Edge Flap R2 shipsets to support F/A-18E/F and EA-18G aircraft retrofit efforts.
A major portion of work related to this contract will be executed in St. Louis, MO.
What’s Favoring Boeing?
As nations across the globe continue to strengthen their defense structures, spending on military arms and ammunition that boast technologically advanced features continues to increase manifold. This also includes increased investments in military aircraft that play a critical role in air warfare missions.
Boeing, a global leader in the development, production, maintenance and enhancement of manned and unmanned aircraft, stands to benefit from such increased demand. The company delivers the most digitally advanced, simply and efficiently produced, and intelligently supported solutions to its customers. Its product portfolio includes a range of combat-proven aircraft like the F/A-18 Super Hornet, P-8, C-17 Globemaster III, EA-18G, etc.
Its ability to develop, produce and mission-enabling upgrades of integrated solutions helps the company witness a significant order inflow for its military aircraft and associated upgrades, like the latest one. Such contract wins tend to boost the company’s operating results from the Boeing Defense, Space & Security (BDS) segment, which generated a solid 9% year-over-year improvement in its fourth-quarter 2023 revenues.
Growth Prospects for BA
Due to widespread geopolitical tensions worldwide, particularly the Russian invasion of Ukraine and the ongoing conflict in the Middle East, nations are rapidly augmenting their defense purchases to strengthen their warfare capabilities. This has led to an increased demand for fighter aircraft, both manned and unmanned, among other defense products, thereby bolstering the prospects for jet makers like Boeing.
To this end, Boeing expects approximately 30% of the worldwide fleet of military aircraft to be retired and replaced over the next 10 years, driving increased demand for services to maintain aging aircraft and enhance aircraft capability. This should also boost demand for new combat jets to replace the older ones, thereby ushering in orders for Boeing.
In line with this, the Mordor Intelligence firm projects the global military aviation market to witness a CAGR of 5.2% during the 2024-2030 period. Such projections indicate immense opportunities for Boeing to reap the benefits of the market’s expansion, with the company’s increased focus on franchise programs such as the MQ-25, the T-7A Red Hawk, KC-46A Tanker, VC-25B and the MH-139A Grey Wolf.
Opportunities for Peers
Apart from Boeing, other prominent defense majors involved in the manufacturing of military aircraft, like Northrop Grumman (NOC - Free Report) , Airbus Group (EADSY - Free Report) and Textron (TXT - Free Report) , are also expected to gain from the military aviation market’s growth opportunities.
Since its inception, Northrop Grumman has been a pioneer in the development of military aircraft. The company has built some of the world’s most advanced aircraft, ranging from the innovative B-2 Spirit stealth bomber to the game-changing E-2D Advanced Hawkeye.
NOC’s Aeronautics Systems unit is engaged in the design, development, production, integration, sustainment and modernization of advanced aircraft systems. Meanwhile, the Mission Systems segment offers advanced mission solutions and multifunction systems like the Airborne Early Warning & Control, the LONGBOW Fire Control Radar and the Scalable Agile Beam Radar.
Airbus Group’s military aircraft consists of the A400M, the C295 tactical transporter, the new-generation A330 Multi Role Tanker Transport and the Eurofighter, the most advanced swing-role fighter ever conceived.
For more than 40 years, the company has been providing its aircraft customers with an extended portfolio of services, ranging from the training of flight and ground staff to live firing exercises anywhere worldwide.
Textron’s military aircraft includes the Beechcraft T-6 training aircraft and the Beechcraft AT-6 light-attack aircraft. The company also manufactures the Beechcraft Model 18 light bomber, the T-44 and T-34 training aircraft and the T-1A jet trainer.
TXT’s subsidiary, Able Aerospace Services, provides component and maintenance, repair and overhaul services in support of commercial and military fixed and rotor-wing aircraft.
Price Performance
Shares of Boeing have gained 0.9% in the past year against the industry’s fall of 6.4%.
Image: Bigstock
Boeing (BA) Wins Deal to Aid F/A-18E/F and EA-18G Jet Programs
The Boeing Company (BA - Free Report) recently clinched a contract involving its F/A-18E/F and EA-18G aircraft. The award was provided by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $94.5 million, the contract is projected to be completed by June 2026. Per the terms of the deal, Boeing will be engaged in the production and delivery of 96 Trailing Edge Flap R2 shipsets to support F/A-18E/F and EA-18G aircraft retrofit efforts.
A major portion of work related to this contract will be executed in St. Louis, MO.
What’s Favoring Boeing?
As nations across the globe continue to strengthen their defense structures, spending on military arms and ammunition that boast technologically advanced features continues to increase manifold. This also includes increased investments in military aircraft that play a critical role in air warfare missions.
Boeing, a global leader in the development, production, maintenance and enhancement of manned and unmanned aircraft, stands to benefit from such increased demand. The company delivers the most digitally advanced, simply and efficiently produced, and intelligently supported solutions to its customers. Its product portfolio includes a range of combat-proven aircraft like the F/A-18 Super Hornet, P-8, C-17 Globemaster III, EA-18G, etc.
Its ability to develop, produce and mission-enabling upgrades of integrated solutions helps the company witness a significant order inflow for its military aircraft and associated upgrades, like the latest one. Such contract wins tend to boost the company’s operating results from the Boeing Defense, Space & Security (BDS) segment, which generated a solid 9% year-over-year improvement in its fourth-quarter 2023 revenues.
Growth Prospects for BA
Due to widespread geopolitical tensions worldwide, particularly the Russian invasion of Ukraine and the ongoing conflict in the Middle East, nations are rapidly augmenting their defense purchases to strengthen their warfare capabilities. This has led to an increased demand for fighter aircraft, both manned and unmanned, among other defense products, thereby bolstering the prospects for jet makers like Boeing.
To this end, Boeing expects approximately 30% of the worldwide fleet of military aircraft to be retired and replaced over the next 10 years, driving increased demand for services to maintain aging aircraft and enhance aircraft capability. This should also boost demand for new combat jets to replace the older ones, thereby ushering in orders for Boeing.
In line with this, the Mordor Intelligence firm projects the global military aviation market to witness a CAGR of 5.2% during the 2024-2030 period. Such projections indicate immense opportunities for Boeing to reap the benefits of the market’s expansion, with the company’s increased focus on franchise programs such as the MQ-25, the T-7A Red Hawk, KC-46A Tanker, VC-25B and the MH-139A Grey Wolf.
Opportunities for Peers
Apart from Boeing, other prominent defense majors involved in the manufacturing of military aircraft, like Northrop Grumman (NOC - Free Report) , Airbus Group (EADSY - Free Report) and Textron (TXT - Free Report) , are also expected to gain from the military aviation market’s growth opportunities.
Since its inception, Northrop Grumman has been a pioneer in the development of military aircraft. The company has built some of the world’s most advanced aircraft, ranging from the innovative B-2 Spirit stealth bomber to the game-changing E-2D Advanced Hawkeye.
NOC’s Aeronautics Systems unit is engaged in the design, development, production, integration, sustainment and modernization of advanced aircraft systems. Meanwhile, the Mission Systems segment offers advanced mission solutions and multifunction systems like the Airborne Early Warning & Control, the LONGBOW Fire Control Radar and the Scalable Agile Beam Radar.
Airbus Group’s military aircraft consists of the A400M, the C295 tactical transporter, the new-generation A330 Multi Role Tanker Transport and the Eurofighter, the most advanced swing-role fighter ever conceived.
For more than 40 years, the company has been providing its aircraft customers with an extended portfolio of services, ranging from the training of flight and ground staff to live firing exercises anywhere worldwide.
Textron’s military aircraft includes the Beechcraft T-6 training aircraft and the Beechcraft AT-6 light-attack aircraft. The company also manufactures the Beechcraft Model 18 light bomber, the T-44 and T-34 training aircraft and the T-1A jet trainer.
TXT’s subsidiary, Able Aerospace Services, provides component and maintenance, repair and overhaul services in support of commercial and military fixed and rotor-wing aircraft.
Price Performance
Shares of Boeing have gained 0.9% in the past year against the industry’s fall of 6.4%.
Image Source: Zacks Investment Research
Zacks Rank
Boeing carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.