Back to top

Image: Bigstock

Lockheed (LMT) Wins $101M Deal to Procure Hellfire Missiles

Read MoreHide Full Article

Lockheed Martin Corp’s (LMT - Free Report) business segment, Missiles and Fire Control, recently secured a modification contract for procuring Hellfire missiles and containers. The U.S. Army Contracting Command, Redstone Arsenal, AL awarded the deal.

Valued at $101.3 million, the contract is expected to be completed by Sep 30, 2024.   Work on the contract will be performed in Orlando, FL.

Importance of Hellfire Missiles

Hellfire is an air-to-ground missile used on rotary and fixed-wing aircraft, which is deployed by the armed forces of the United States and 15 other nations. This reflects the widespread demand that this particular precision weapon enjoys globally.

What’s Favoring Lockheed?

In recent times, increasing geopolitical tensions across the globe have induced many nations to expand their military arsenal, with missiles constituting a significant part of that. The company, being one of the major missile makers in the United States, stands out among peers by virtue of its diverse programs and strong order bookings for different variants of missiles. This allows the company’s Missiles and Fire Control unit to deliver positive top-line growth.

In second-quarter 2021, revenues at the Missiles and Fire Control unit increased a solid 5% year over year. Given this unit’s proven expertise and increasing demand for its various missile programs, we expect consistent order flow for Lockheed Martin from the Pentagon. This, in turn, will enable the company’s missile business unit to continue to generate similar top-line growth in the coming days.

Moreover, the fiscal 2022 defense budget has provisioned a total of $20.4 billion investment for missile defense. Lockheed Martin provides high-quality missile solutions and its capability to develop new products per the requirement of the U.S. defense establishments makes us hopeful that the company will grab more deals, similar to the latest one, going forward.

Looking Ahead

Per Mordor Intelligence research firm, the global missile and missile defense market is projected to register a CAGR of more than 10% during the 2020-2025 period. With North America expected to continue to lead this market, such growth projections will certainly benefit U.S. missile makers, including Lockheed Martin, Raytheon Technologies (RTX - Free Report) , Northrop Grumman (NOC - Free Report) , and Boeing (BA - Free Report) , in the future.

Price Performance

Shares of Lockheed Martin have declined 2.5% in a year compared with the industry’s decline of 9.9%.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank

Lockheed currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.