Back to top

Image: Bigstock

Boeing (BA) Clinches Deal to Support Chinook Block II Program

Read MoreHide Full Article

The Boeing Company (BA - Free Report) recently secured a modification contract worth $18.4 million to  support the MH-47G Chinook Block II production program. The award has been offered by the U.S. Special Operations Command, Tampa, FL.

Majority of work related to this contract will be carried out in Ridley Park, PA. Per the terms, Boeing will procure long-lead components and parts for the MH-47G Chinook Block II production program.

Importance of Chinook

Chinook Block II is a heavy-lift military rotorcraft, which combines new technologies, including the Advanced Chinook Rotor Blade, redesigned fuel tanks, a strengthened fuselage, and an improved drivetrain – all aimed at increasing lift capability.

With more than 950 Chinooks in 20 countries, the program continues to deliver unrivaled production, maintenance and sustainment cost efficiencies.

What’s Favoring Boeing?

Of the varied defense equipment that Boeing manufactures, the company’s strength lies in the development of combat-proven aircraft, such as Chinook Block II rotorcraft. Additionally, Boeing has started developing military aerial refueling and strategic transport aircraft for its fixed-wing military aircraft programs.

Being the United States’ largest jet maker and considering the latest developments in the combat aircraft section, Boeing enjoys a smooth flow of contracts for military jets and its associated upgrades. The latest contract win is an example of the same.  

Such contract wins are anticipated to fuel this aerospace giant’s growth, driven by the increasing defense spending provisions made by the current U.S. administration.

It is imperative to mention in this context that the fiscal 2022 budget request submitted by President Biden reflects funding request worth $715 billion for the Department of Defense (DoD). This proposal reflects a 1.6% increase from the prior year’s enacted amount. If approved, fresh order flows from the Pentagon will boost growth prospects of Boeing.

Growth Prospects

Per a report by Mordor Intelligence firm, the global military rotorcraft market is expected to witness a CAGR of 3% during 2020-2025 period. With North America dominating this market, such projections bode well for U.S. rotorcraft-makers like Boeing, Lockheed Martin (LMT - Free Report) and Textron (TXT - Free Report) .

Price Movement

Boeing’s share price has surged 26.1% in the past year compared with the industry’s growth of 14.7%.

Zacks Investment ResearchImage Source: Zacks Investment Research

Zacks Rank & A Key Pick

Boeing currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the same sector is Teledyne Technologies (TDY - Free Report) , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Teledyne delivered an average earnings surprise of 10.53% in the trailing four quarters. The Zacks Consensus Estimate for 2021 earnings has improved 11.1% over the past 60 days.

Zacks' Top Picks to Cash in on Artificial Intelligence

In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create ""the world's first trillionaires."" Zacks' urgent special report reveals 3 AI picks investors need to know about today.  

See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>