We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
General Dynamics (GD) Wins Deal to Build Submarine With VPM
Read MoreHide Full Article
General Dynamics Corp.’s (GD - Free Report) Electric Boat division recently secured a $2.42 billion worth modification contract to exercise an option for the construction of one Block V Virginia-class submarine with Virginia Payload Module (VPM). The deal was awarded by The Naval Sea Systems Command, Washington, DC.
Majority of work related to this deal will be executed in Newport News, VA and Quonset Point, RI. The contract is expected to be completed by February 2030.
Recent Developments in Virginia-Class Submarines
General Dynamics is the lead contractor of the Virginia-class submarine program. Since the delivery of the lead Virginia-class submarine, General Dynamics has substantially reduced the cost and delivery time of these submarines from 84 months to 66 months alongside improving mission capability and ship construction quality. Notably, the company is developing the VPM for the fifth block of Virginia-class submarines.
In 2019, the Navy awarded Electric Boat a $22.2-billion contract, the largest shipbuilding deal in the Navy’s history for construction of the fifth block of Virginia-class submarines. Notably, with the Block V contract, there are now 19 Virginia-class submarines in the company’s backlog, scheduled for delivery through 2029. This surely reflects the solid demand that Virginia class submarines enjoy in the shipbuilding market.
Interestingly, General Dynamics has been investing $1.8 billion of capital in expanded and modernized facilities at Electric Boat to support the growth in submarine construction. This will enable the company to cater to the solid demand for its Virginia class submarines in the shipbuilding market.
What Favors General Dynamics?
Being one of the only two contractors in the world equipped to build nuclear-powered submarines, General Dynamics enjoys a dominant position as a Navy contractor. Moreover, the United States is strategically strengthening its naval power by upgrading missile submarines, driven by the rising widespread geo-political tensions across the world.
Inevitably, demand for its technical expertise and other support services required for proper functioning of submarines also remains high. As a result, defense giants like General Dynamics enjoy a smooth flow of contracts like the latest one.
Looking Ahead
Per a Technavio report, the global naval shipbuilding market is expected to reach $14.36 billion during the 2020-2024 period, seeing a CAGR of approximately 3%. This, in turn, is likely to drive demand for various assault ships and submarines. General Dynamics — being a major shipbuilding giant — should benefit from these growth opportunities.
Other submarine manufacturers like Bae Systems PLC (BAESY - Free Report) , Mitsubishi Heavy Industries, Ltd. (MHVYF - Free Report) and Huntington Ingalls Industries (HII - Free Report) are also likely to benefit from the same.
Price Performance & Zacks Rank
Shares of General Dynamics have gained 54.6% in a year compared with the industry’s surge of 43.7%. The company currently carries a Zacks Rank #4 (Sell).
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
General Dynamics (GD) Wins Deal to Build Submarine With VPM
General Dynamics Corp.’s (GD - Free Report) Electric Boat division recently secured a $2.42 billion worth modification contract to exercise an option for the construction of one Block V Virginia-class submarine with Virginia Payload Module (VPM). The deal was awarded by The Naval Sea Systems Command, Washington, DC.
Majority of work related to this deal will be executed in Newport News, VA and Quonset Point, RI. The contract is expected to be completed by February 2030.
Recent Developments in Virginia-Class Submarines
General Dynamics is the lead contractor of the Virginia-class submarine program. Since the delivery of the lead Virginia-class submarine, General Dynamics has substantially reduced the cost and delivery time of these submarines from 84 months to 66 months alongside improving mission capability and ship construction quality. Notably, the company is developing the VPM for the fifth block of Virginia-class submarines.
In 2019, the Navy awarded Electric Boat a $22.2-billion contract, the largest shipbuilding deal in the Navy’s history for construction of the fifth block of Virginia-class submarines. Notably, with the Block V contract, there are now 19 Virginia-class submarines in the company’s backlog, scheduled for delivery through 2029. This surely reflects the solid demand that Virginia class submarines enjoy in the shipbuilding market.
Interestingly, General Dynamics has been investing $1.8 billion of capital in expanded and modernized facilities at Electric Boat to support the growth in submarine construction. This will enable the company to cater to the solid demand for its Virginia class submarines in the shipbuilding market.
What Favors General Dynamics?
Being one of the only two contractors in the world equipped to build nuclear-powered submarines, General Dynamics enjoys a dominant position as a Navy contractor. Moreover, the United States is strategically strengthening its naval power by upgrading missile submarines, driven by the rising widespread geo-political tensions across the world.
Inevitably, demand for its technical expertise and other support services required for proper functioning of submarines also remains high. As a result, defense giants like General Dynamics enjoy a smooth flow of contracts like the latest one.
Looking Ahead
Per a Technavio report, the global naval shipbuilding market is expected to reach $14.36 billion during the 2020-2024 period, seeing a CAGR of approximately 3%. This, in turn, is likely to drive demand for various assault ships and submarines. General Dynamics — being a major shipbuilding giant — should benefit from these growth opportunities.
Other submarine manufacturers like Bae Systems PLC (BAESY - Free Report) , Mitsubishi Heavy Industries, Ltd. (MHVYF - Free Report) and Huntington Ingalls Industries (HII - Free Report) are also likely to benefit from the same.
Price Performance & Zacks Rank
Shares of General Dynamics have gained 54.6% in a year compared with the industry’s surge of 43.7%. The company currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>