Lockheed Martin Corp.’s (LMT - Free Report) arm, Rotary and Mission Systems, recently clinched a modification contract involving the ship integration and test of the Aegis Weapon System.
Valued at $67.8 million, the deal has been awarded by the Naval Sea Systems Command, Washington, D.C. The contract is expected to be complete by September 2024. The work related to this deal will be carried out at multiple locations across the United States.
What’s Favoring Lockheed Martin?
LMT’s Aegis Combat System is a centralized, automated, command-and-control (C2) and weapon control system designed as a complete system, most suitable for military missions, ranging from detection to kill. It is the U.S. Navy’s most modern surface combat system and the first fully integrated combat system built to defend against advanced air and surface threats.
With nations boosting their defense capabilities, investments in naval combat systems are on the rise. Per a report from the Mordor Intelligence firm, the naval combat system market is likely to witness a CAGR of more than 2.5% during the 2023-2028 period. This should benefit LMT, which designs surface combatant ships for the U.S. Navy and international customers as well as integrated warfare systems like Aegis that serve as a sea and land-based element of the U.S. missile defense system.
Considering the aforementioned market’s growth opportunities, Lockheed’s expertise in building naval combat weapons and consistently upgrading them is likely to result in a steady flow of contracts for the company, like the latest one. This is likely to boost its revenue generation prospects.
Peer Prospects
Other defense companies that may enjoy the perks of the expanding naval combat system market are as follows:
Huntington Ingalls Industries (HII - Free Report) : Huntington Ingalls is known for specializing in manufacturing amphibious assault and expeditionary ships and provides more than 70% of ships for the U.S. Navy.
The Zacks Consensus Estimate for Huntington’s 2023 earnings suggests a growth rate of 0.3% from the prior-year reported figure. The consensus estimate for HII’s 2023 sales indicates a growth rate of 3.5% from the prior-year reported figure.
General Dynamics (GD - Free Report) : General Dynamics is one of the leading designers and manufacturers of surface combatant and auxiliary ships for the U.S. Navy. It also provides maintenance, modernization and lifecycle support services for Navy ships.
General Dynamics has a long-term earnings growth rate of 8.9%. Its investors have gained 7.4% in the past three months.
BAE Systems plc (BAESY - Free Report) : BAE Systems’ Maritime is poised to benefit as it designs and manufactures naval ships and submarines as well as state-of-the-art combat systems and equipment. The company also provides maintenance and modernization programs to support ships and equipment in service worldwide.
The Zacks Consensus Estimate for BAE Systems’ 2023 sales suggests a growth rate of 15.7% from the prior-year reported figure. Its shares have rallied 43.5% in the past year.
Price Movement
In the past year, shares of Lockheed Martin have increased 7.1% against the industry’s fall of 2%.
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.
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Lockheed Martin Corp.’s (LMT - Free Report) arm, Rotary and Mission Systems, recently clinched a modification contract involving the ship integration and test of the Aegis Weapon System.
Valued at $67.8 million, the deal has been awarded by the Naval Sea Systems Command, Washington, D.C. The contract is expected to be complete by September 2024. The work related to this deal will be carried out at multiple locations across the United States.
What’s Favoring Lockheed Martin?
LMT’s Aegis Combat System is a centralized, automated, command-and-control (C2) and weapon control system designed as a complete system, most suitable for military missions, ranging from detection to kill. It is the U.S. Navy’s most modern surface combat system and the first fully integrated combat system built to defend against advanced air and surface threats.
With nations boosting their defense capabilities, investments in naval combat systems are on the rise. Per a report from the Mordor Intelligence firm, the naval combat system market is likely to witness a CAGR of more than 2.5% during the 2023-2028 period. This should benefit LMT, which designs surface combatant ships for the U.S. Navy and international customers as well as integrated warfare systems like Aegis that serve as a sea and land-based element of the U.S. missile defense system.
Considering the aforementioned market’s growth opportunities, Lockheed’s expertise in building naval combat weapons and consistently upgrading them is likely to result in a steady flow of contracts for the company, like the latest one. This is likely to boost its revenue generation prospects.
Peer Prospects
Other defense companies that may enjoy the perks of the expanding naval combat system market are as follows:
Huntington Ingalls Industries (HII - Free Report) : Huntington Ingalls is known for specializing in manufacturing amphibious assault and expeditionary ships and provides more than 70% of ships for the U.S. Navy.
The Zacks Consensus Estimate for Huntington’s 2023 earnings suggests a growth rate of 0.3% from the prior-year reported figure. The consensus estimate for HII’s 2023 sales indicates a growth rate of 3.5% from the prior-year reported figure.
General Dynamics (GD - Free Report) : General Dynamics is one of the leading designers and manufacturers of surface combatant and auxiliary ships for the U.S. Navy. It also provides maintenance, modernization and lifecycle support services for Navy ships.
General Dynamics has a long-term earnings growth rate of 8.9%. Its investors have gained 7.4% in the past three months.
BAE Systems plc (BAESY - Free Report) : BAE Systems’ Maritime is poised to benefit as it designs and manufactures naval ships and submarines as well as state-of-the-art combat systems and equipment. The company also provides maintenance and modernization programs to support ships and equipment in service worldwide.
The Zacks Consensus Estimate for BAE Systems’ 2023 sales suggests a growth rate of 15.7% from the prior-year reported figure. Its shares have rallied 43.5% in the past year.
Price Movement
In the past year, shares of Lockheed Martin have increased 7.1% against the industry’s fall of 2%.
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.
Top 5 ChatGPT Stocks Revealed
Zacks Senior Stock Strategist, Kevin Cook names 5 hand-picked stocks with sky-high growth potential in a brilliant sector of Artificial Intelligence. By 2030, the AI industry is predicted to have an internet and iPhone-scale economic impact of $15.7 Trillion.
Today you can invest in the wave of the future, an automation that answers follow-up questions … admits mistakes … challenges incorrect premises … rejects inappropriate requests. As one of the selected companies puts it, “Automation frees people from the mundane so they can accomplish the miraculous.”
Download Free ChatGPT Stock Report Right Now >>
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