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Lockheed Martin (LMT) Wins $100M Support Contract for JASSM

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Lockheed Martin Corp. (LMT - Free Report) has won a contract from the U.S. Air Force to support the production of Joint Air-to-Surface Standoff Missile (JASSM).

Contract Details

The contract is valued at $100 million and was awarded by the Air Force Life Cycle Management Center, Eglin Air Force Base, FL.

Per the contract, Lockheed Martin will provide lifecycle support for work related to JASSM, Long Range Anti-Ship Missile (Air Force Inventory), JASSM-Extended Range and any JASSM variant to support system upgrades, integration, production, sustainment, management and logistics.

The work is scheduled to be completed by Apr 17, 2022 and will be executed in Orlando, FL.

JASSM Attributes

JASSM is a stealthy, precision-guided cruise missile with a penetrating blast-fragmentation warhead. These missiles have been designed with infrared seekers and enhanced digital anti-jam Global Positioning System. They are integrated on the B-1, B-2, B-52, F-16 and F-15E jets of the Air Force. They are also carried on the F/A-18A/B and F-18C/D aircraft worldwide. Lockheed has been manufacturing the JASSM cruise missiles in a Troy, AL-based plant since the late 1990s.

JASSM Extended Range – a newer version of JASSM – can also be installed in the F-16 aircraft since they are identical in size and capability. However, JASSM-ER is more fuel efficient and is powered by a turbo-fan engine instead of a turbo-jet engine. It can travel over twice the distance of that of JASSM.

Our View

Lockheed Martin is the largest U.S. defense contractor with a platform-centric focus that guarantees a steady inflow of follow-on orders from a leveraged presence in the Army, Air Force, Navy and IT programs. Recently, the company’s Aeronautics Co. business division has won a modification contract from the U.S. Navy. The original advance acquisition contract involved low-rate initial production of Lot 10 F-35 Lightning II and is valued at $372.9 million.

Again, it signed a deal worth $288 million to acquire Instrumentable Multiple Integrated Laser Engagement System (I-MILES) Combat Vehicle Tactical Engagement Simulation System (CV TESS).

Price Movement

Lockheed Martin’s stock has improved about 18.6% in the last one year, underperforming the Zacks categorized Aerospace/Defense industry’s gain of 23.2%. This could be because the earlier budget cuts have put pressure on the top line although the present defense budget is more in favor of the sector. We believe that budget deficits and political uncertainty might make future defense budgets vulnerable to cutbacks. . As a result, Lockheed Martin’s performance lagged behind the likes of General Dynamics Corp. (GD - Free Report) , Boeing Co. (BA - Free Report) and Huntington Ingalls Industries, Inc. (HII - Free Report) , who have all outperformed the industry.




Zacks Rank

Lockheed Martin currently has a Zacks Rank #2 (Buy). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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