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Boeing Wins $59M Deal to Aid MOKV Technology Risk Reduction
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Aerospace giant, The Boeing Company (BA - Free Report) , recently clinched a contract related to the Multi-Object Kill Vehicle (MOKV) technology. The deal can be expected to be accomplished by May 12, 2020.
Details of the Deal
Valued at $58.6 million, the contract was awarded by the Missile Defense Agency, Huntsville, AL. Through this agreement, Boeing aims at improving performance and reducing risk for MOKV advanced communications, engagement management, and the discriminating seeker. This objective is in line with the Missile Defense Agency's technology-risk reduction strategy.
Boeing plans to utilize fiscal 2017 research, development, test and engineering funds to complete this deal, while work related to this contract will be carried out in Huntsville, AL. The company competitively procured this deal via publication on the Federal Business Opportunities website through an advanced technology innovation broad agency announcement.
A Brief Note on MOKV
MOKV is a new generation ballistic missile defense (BMD) system that allows more than one kill vehicle to be launched from a single booster. The system consists of a carrier vehicle with on-board sensors along with a number of small and simple kill vehicles that can be independently cued against objects in a threat cluster.
Our View
With the recent rise in terrorist activities across the globe (particularly threats by radical institutions with access to weapons), manufacturers of missiles and missile defense systems are enjoying steady demand. This has compelled developed nations to build their defense by stocking up on tactical weaponries.
Coming to Boeing, in addition to enjoying a strong forte in the combat-proven aircraft space thanks to its broadly diversified programs, strong order bookings and backlog enabled the company to acquire equally attractive shares of the defense missile industry. Consequently, the company’s Defense, Space & Security segment witnessed healthy revenues and margins growth during the first quarter of 2017.
Notably, majority of the top 10 weapon manufacturers hail from the U.S. Considering this, Boeing is poised to gain traction in the aerospace and defense industry with the global missiles and missile defense system market projected to grow at a CAGR of 2.18% during 2017–2027 to reach a value of $41 billion.
Meanwhile, Trump’s proposal to boost the nation’s defense budget by 10% in 2018 from 2016 is likely to benefit defense biggies like Boeing.
Price Movement
Shares of Boeing have gained 36.6% over the last 12 months, outperforming the Zacks categorized Aerospace–Defense industry’s gain of 19.9%. This could be because the company’s strong balance sheet and cash flows provide financial flexibility in matters of incremental dividend, ongoing share repurchases and earnings accretive acquisitions. The company also poses strong competition to its peers like General Dynamics Corp. (GD - Free Report) , Northrop Grumman Corp. (NOC - Free Report) and Lockheed Martin Corp. (LMT - Free Report) .
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Boeing Wins $59M Deal to Aid MOKV Technology Risk Reduction
Aerospace giant, The Boeing Company (BA - Free Report) , recently clinched a contract related to the Multi-Object Kill Vehicle (MOKV) technology. The deal can be expected to be accomplished by May 12, 2020.
Details of the Deal
Valued at $58.6 million, the contract was awarded by the Missile Defense Agency, Huntsville, AL. Through this agreement, Boeing aims at improving performance and reducing risk for MOKV advanced communications, engagement management, and the discriminating seeker. This objective is in line with the Missile Defense Agency's technology-risk reduction strategy.
Boeing plans to utilize fiscal 2017 research, development, test and engineering funds to complete this deal, while work related to this contract will be carried out in Huntsville, AL. The company competitively procured this deal via publication on the Federal Business Opportunities website through an advanced technology innovation broad agency announcement.
A Brief Note on MOKV
MOKV is a new generation ballistic missile defense (BMD) system that allows more than one kill vehicle to be launched from a single booster. The system consists of a carrier vehicle with on-board sensors along with a number of small and simple kill vehicles that can be independently cued against objects in a threat cluster.
Our View
With the recent rise in terrorist activities across the globe (particularly threats by radical institutions with access to weapons), manufacturers of missiles and missile defense systems are enjoying steady demand. This has compelled developed nations to build their defense by stocking up on tactical weaponries.
Coming to Boeing, in addition to enjoying a strong forte in the combat-proven aircraft space thanks to its broadly diversified programs, strong order bookings and backlog enabled the company to acquire equally attractive shares of the defense missile industry. Consequently, the company’s Defense, Space & Security segment witnessed healthy revenues and margins growth during the first quarter of 2017.
Notably, majority of the top 10 weapon manufacturers hail from the U.S. Considering this, Boeing is poised to gain traction in the aerospace and defense industry with the global missiles and missile defense system market projected to grow at a CAGR of 2.18% during 2017–2027 to reach a value of $41 billion.
Meanwhile, Trump’s proposal to boost the nation’s defense budget by 10% in 2018 from 2016 is likely to benefit defense biggies like Boeing.
Price Movement
Shares of Boeing have gained 36.6% over the last 12 months, outperforming the Zacks categorized Aerospace–Defense industry’s gain of 19.9%. This could be because the company’s strong balance sheet and cash flows provide financial flexibility in matters of incremental dividend, ongoing share repurchases and earnings accretive acquisitions. The company also poses strong competition to its peers like General Dynamics Corp. (GD - Free Report) , Northrop Grumman Corp. (NOC - Free Report) and Lockheed Martin Corp. (LMT - Free Report) .
Zacks Rank
Boeing currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>