Back to top

Image: Bigstock

Lockheed (LMT) Wins $102M Deal to Support Apache Helicopter

Read MoreHide Full Article

Lockheed Martin Corp.’s (LMT - Free Report) business segment, Missiles and Fire Control (MFC) recently clinched a contract concerning the Modernized Target Acquisition Designation Sight/Pilot Night Vision Sensor (M-TADS/PNVS) performance-based logistics program for Apache combat helicopter. The award has been offered by the U.S. Army Contracting Command, Redstone Arsenal, AL.

Valued at $102.4 million, the contract is expected to get completed by Jul 31, 2024. Per the terms, the MFC unit will manufacture and supply hardware components and spares of Apache’s M-TADS/PNVS. 

A Brief Note on the M-TADS/PNVS Systems

The Modernized Target Acquisition Designation Sight/Pilot Night Vision Sensor (M-TADS/PNVS), also known as Arrowhead, is an electro-optical sensor that provides enhanced situational awareness to Apache’s aircrew with greater performance and survivability. It offers long-range, precision engagement and pilotage solutions for missions conducted during the day, night or adverse weather conditions.

What’s Favoring Lockheed Martin?

The rising need for improved military performance, integration of high-performance miniaturized electronic systems and increasing demand for lightweight textiles are driving the growth of the military sensor market. Being a prominent defense contractor in the United States, Lockheed Martin has been winning a number of contracts from the Pentagon, related to sensor systems and their upgrades. The latest contract win is a testament to that.

Growth Prospects

Per Markets and Markets Research, the global military radar market is expected to reach $17.4 billion by 2025 at a CAGR of 4.4% from 2020. Such growth projections for the aforementioned market should benefit prominent radar manufacturers like Lockheed Martin, Raytheon Technologies (RTX - Free Report) , L3Harris Technologies (LHX - Free Report) and Northrop Grumman (NOC - Free Report) .

Raytheon’s product portfolio consists of varied radars like integrated air and missile defense radars, ballistic missile radars, surveillance radars as well as air dominance radars. Radars like AN-SPY 6, AN-TPY-2, APG-79, APG-82 are some of its combat-proven products that enjoy solid demand in the global military radar market.

Raytheon’s third-quarter 2021 adjusted earnings per share (EPS) of $1.26 outpaced the Zacks Consensus Estimate by 17.8%. RTX’s shares have gained 20.5% in the past three years.

L3Harris manufactures combat-proven radars like SPS-48 land-based surveillance radar, AN/APY-11 Multimode radar, Tactical Air Surveillance radar, AN/SPS-48G long-range 3D surveillance radar and many more.  

L3Harris’ third-quarter 2021 adjusted earnings came in at $3.21 per share, which surpassed the Zacks Consensus Estimate by 1.6% and also increased 13% from the year-ago quarter. LHX’s shares have the gained 13% in the past year.

Northrop’s broad portfolio of products comprises radars like AN/APG-83 scalable agile beam radar, AN/ASQ-236 Dragon’s eye radar pod as well as AN/APG-81 and AN/APG-71 radars.

Interestingly, Northrop reported third-quarter 2021 earnings of $6.63 per share, which surpassed the Zacks Consensus Estimate by 11.8% and increased 13% year over year. NOC’s shares have gained 27.3% in the past year.

Price Movement and Zacks Rank

Shares of Lockheed Martin have lost 0.1% in the past year compared with the industry's decline of 30.3%.

Zacks Investment ResearchImage Source: Zacks Investment Research

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