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Defense Stock Roundup: NOC, LMT Win Orders, LHX Reorganizes Segments

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Over the past week, a generous flow of contracts from the Pentagon likely kept major defense contractors buoyant. Consequently, major defense stock indices ended in the green in the trailing five trading sessions. The S&P 500 Aerospace & Defense (Industry) index inched up 0.8%, while the Dow Jones U.S. Aerospace & Defense index rose 0.7% in the aforementioned time period.

Among the past week’s highlights, defense majors namely Northrop Grumman (NOC - Free Report) , Lockheed Martin Corp. (LMT - Free Report) , The Boeing Company (BA - Free Report) and Raytheon Technologies Corp. (RTX - Free Report) secured notable deals from the Department of Defense’s daily funding session. Moreover, L3Harris Technologies (LHX - Free Report) announced the reorganization of its business segment.

Recap of Past Week’s Important Stories

1.    Northrop Grumman’s business unit, Northrop Grumman Systems Corp., has secured a hybrid contract for the low-rate initial production and full-rate production of the Integrated Battle Command System. The award has been offered by the U.S. Army Contracting Command, Redstone Arsenal, AL.

Valued at $1.38 billion, the contract is expected to get completed by Dec 22, 2026 (read more: Northrop's Unit Wins $1.4B Deal to Manufacture IBCS).

2.    Lockheed's business unit, Aeronautics, clinched a modification contract to provide logistics support activities to F-35 Lightning II Joint Strike Fighter jets. The deal has been awarded by the Naval Air Systems Command, Patuxent River, MD.  

Valued at $492.7 million, the contract is expected to be completed by December 2022 (read more: Lockheed Martin Wins $492.7M Modification Contract).

Lockheed Martin’s business segment, Missiles and Fire Control (MFC) 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 (read more: Lockheed Wins $102M Deal to Support Apache Helicopter).

3.    Boeing clinched a contract to support the modification of the F-15MJ aircraft for the Japan Air Self Defense Force. The award has been offered by the Air Force Life Cycle Management Center, Wright-Patterson Air Force Base, OH.

Valued at $471.3 million, the contract is expected to be completed by Dec 31, 2028. Work related to the deal will be executed in St. Louis, MO (read more: Boeing Wins $471M Deal to Modify Japan's F-15 Jets).

4.     Raytheon secured a modification contract for the manufacturing and delivery of five Next Generation Jammer Mid-Band (NGJ-MB). The award has been offered by the Naval Air Systems Command, Patuxent River, MD.

Valued at $226.7 million, the contract is expected to get completed by September 2024. The majority of the work related to this deal will be performed in Forest, MS (read more: Raytheon Wins $227M Deal to Build Next-Generation Jammer).

5.    L3Harris revealed that it is implementing a new alignment and organization of its core businesses. Resultantly, the company will now have three segments, as opposed to its prior four segments, which are Integrated Mission Systems, Space and Airborne Systems and Communication Systems.

Such reorganizations are expected to enable L3Harris in offering more advanced technological solutions, thereby strengthening its position in the defense space. 

Performance

Over the past five trading sessions, the defense biggies put up a solid show, except Textron.  Boeing gained the most, with its shares up 2.3%, followed by Raytheon.

In the last six months, the industry's performance was mixed. While Lockheed, Boeing and Raytheon lost, Northrop and Textron gained.

The following table shows the price movement of the major defense players over the past five trading days and during the last six months.

CompanyPast WeekLast 6 Months
LMT0.06%-7.11%
BA2.31%-14.94%
GD0.16%10.04%
RTX2.03%-0.74%
NOC0.34%4.42%
TXT-0.84%11.82%
LHX0.59%-3.59%