Lockheed Martin Corp.’s ( LMT Quick Quote LMT - Free Report) business unit, Aeronautics, recently secured a modification contract for procurement of long lead materials, parts, components and support that are needed to maintain on-time production and delivery of 133 F-35 jets of the 16th Lot. Work related to this deal is expected to be completed by May 2026.
Valued at $903.6 million, the contract has been awarded by the Naval Air Systems Command, Patuxent River, MD. Majority of work for this contract will be conducted in Fort Worth, TX.
Rise in Demand Aids F-35 Program
The rise in global terrorism and adverse geopolitical situations has increased the need for enhancing the nation's defense budget, a major portion of which is allocated to combat aircraft. Notably, Lockheed’s F-35 holds a dominant position thanks to its combat-proven features. The F-35 program is supported by an international team of leading aerospace majors such as
Northrop Grumman ( NOC Quick Quote NOC - Free Report) , BAE Systems ( BAESY Quick Quote BAESY - Free Report) and Pratt & Whitney, a unit of Raytheon Technologies ( RTX Quick Quote RTX - Free Report) .
In particular, Northrop Grumman rendered its expertise in carrier aircraft and low-observable stealth technology to this program. Also, BAE Systems’ short takeoff and vertical landing experience, and air systems sustainment supported the jet’s combat capabilities. Pratt & Whitney offered its combat-proven engine to this jet.
Consequently, this jet program frequently wins contracts from both the Pentagon and other U.S. allies. The latest contract win is a bright example of that. In 2020, the company secured a $1.93-billion deal to support the F-35 program.
Lockheed’s Aeronautics unit successfully delivered 31 F-35 jets during the third quarter of 2020. Considering its growing global stature, we expect this business segment to consistently perform such impressive delivery in the coming days as well.
Moreover, the production of F-35 jets is expected to continue for many years, given the U.S. government's current inventory target of 2,456 aircraft for the Air Force, Marine Corps and Navy. Consequently, we expect Lockheed Martin to witness more order inflows for F-35, like the latest one, which in turn should bolster this defense contractor’s top line.
Price Movement and Zacks Rank
Shares of this Zacks Rank #3 (Hold) company have lost 14.1% in the past year compared with the
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