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Lockheed Martin (LMT) Wins $1.4B Support Contract for C-130J

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Lockheed Martin Corporation (LMT - Free Report) recently inked a deal involving the C-130J aircraft fleet. The deal has been awarded by the Air Force Life Cycle Management Center, Robins Air Force Base, GA.

Details of the Deal

Valued at $1.42 billion, the contract is expected to be completed by Jan 31, 2032. The latest deal includes logistics support and sustainment for the C-130J aircraft. The work related to this deal will be executed in Marietta, GA.

Importance of C-130J Aircraft

The global adaptability of the C-130J family of aircraft can be gauged from its worldwide recognition,which scales across 22 nations and 26 operators. Its performance is proven with more than 2 million flight hours, supporting tactical airlifts, search and rescues, special operations, commercial and refueling missions worldwide.

The stealth aircraft boasts diverse, multi-mission capabilities that enable the military to carry out airborne missions effectively.

Due to its remarkable features and Lockheed Martin’s continuous efforts to enhance and expand this family of the fleet, LMT continues to witness a steady inflow of orders involving the aircraft. The latest contract win is a testament to that.

Growth Prospects

In a bid to modernize and strengthen the defense system, nations are increasing their defense spending on military arsenals and weaponry amid rising geopolitical tensions and amplified terrorist threats.

In this context, it is worth mentioning that an efficient military aircraft with capabilities to carry out anairborne mission effectively has recorded strong growth in demand. The rising threats may propel demand further going forward.

Per Mordor Intelligence projections, the global military aircraft market is expected to witness a CAGR of more than 4.5% from 2021 through 2026. Such projections exemplify immense opportunities for defense majors like Lockheed Martin to prosper in the growing demand and boost their revenues from the military aircraft arena.

Considering bright growth prospects in the military aircraft space, prominent defense majors who stand to benefit areNorthrop Grumman(NOC - Free Report) , Airbus Group (EADSY - Free Report) and Textron (TXT - Free Report) .

Northrop Grumman built some of the world’s most advanced aircraft, ranging from the innovative B-2 Spirit stealth bomber to the game-changing E-2D Advanced Hawkeye.

Northrop Grumman has a long-term (three to five years) earnings growth rate of 6.2%. The Zacks Consensus Estimate for Northrop Grumman’s 2023earnings indicates year-over-year growth of 10.7%.NOC’s investors have gained 23.2% in the past year.

Airbus Group’s military aircraft comprise the A400M, the C295 tactical transporter, the new-generation A330 Multi Role Tanker Transport and the Eurofighter, the most modern swing-role fighter ever conceived.

The Zacks Consensus Estimate for Airbus Group’s 2022 earnings indicates year-over-year growth of 90.8%. Shares of EADSY have returned 20.8% value to its investors in the past year.

Textron’s military aircraft include the Beechcraft T-6 training aircraft and the Beechcraft AT-6 light attack aircraft. The company also manufactures the Beechcraft Model 18 light bomber, the T-44 and T-34 training aircraft and the T-1A jet trainer.

Textron boasts a long-term earnings growth rate of 28.3%. The Zacks Consensus Estimate for Textron’s 2023earnings has been revised upward by 0.4% to $4.69 in the past 60 days. TXT stock has appreciated 48.7% in the past year.

Price Movement

In the past year, shares of LockheedMartin have rallied 16.4% compared to the industry’s fall of 32.6%.

Zacks Investment ResearchImage Source: Zacks Investment Research

Zacks Rank

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

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