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Lockheed (LMT) Inks Deal for 35 F-35 Fighter Jets From Germany
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Per major media sources, Lockheed Martin Corporation (LMT - Free Report) recently secured a deal for the supply of 35 F-35 Fighter Jets to Germany amid the ongoing Russia-Ukraine crisis. The move is in sync with Germany’s latest announcement to strengthen its defense structure. This surely bodes well for Lockheed Martin as the F-35 program remains a key catalyst for its Aeronautics business unit’s top line.
Rationale Behind the Deal
The tiff between Russia and Ukraine has resulted in nations increasing their military spending, mainly to upgrade their defense weaponry and arsenals. In this context, it is imperative to mention that Germany recently pledged to increase its defense spending to approximately $845 billion in a bid to protect its country from any sudden war crisis. This defense spending includes a “special fund” of $113 billion solely for armament projects.
Additionally, the recent purchase deal by Germany will also serve the nation’s purpose of replacing its age-old Tornado, which the country earlier decided to replace with Boeing’s F-18. The recent purchase by Germany is likely to boost the revenue growth prospects of LMT’s Aeronautics business unit.
Growing Importance of F-35 in Europe
F-35 enjoys strong demand in Europe. In December 2021, in a bid to replace its fleet of F/A-18 Hornets, Finland announced the purchase of 64 F-35A jets for $11.3 billion. Before this development, in June 2021, Switzerland announced the purchase of 36 F-35A jets. Additionally, apart from Finland and Switzerland, Poland, Denmark, Italy, Norway and the Netherlands are also equipped with one or more F-35 jets.
This exemplifies the growing importance of Lockheed Martin’s F-35 jets in Europe. Also, other European regions may increase their defense spending in the developing threat situation after Russia’s invasion of Ukraine, leading to more inflow of contracts for Lockheed Martin’s F-35 jets, like the latest one.
Opportunities for Peers
As nations increase their defense spending following the latest Russia-Ukraine conflict, defense majors who are likely to benefit from this increased demand for weaponry are Raytheon Technologies (RTX - Free Report) , General Dynamics (GD - Free Report) and Northrop Grumman (NOC - Free Report) .
Raytheon Technologies’ defense business serves both domestic and international customers as a prime contractor or subcontractor on a broad portfolio of defense and related programs for military and government customers.
The long-term earnings growth rate for Raytheonis pegged at 10.2%. Shares of RTX have appreciated 24% in the past year.
General Dynamics offers a broad portfolio of innovative products and services in business aviation, combat vehicles, weapons systems and munitions, IT and C4ISR solutions, and shipbuilding and ship repair.
General Dynamics has a long-term earnings growth rate of 9.6%. The Zacks Consensus Estimate for General Dynamics’ 2022 earnings implies a growth rate of 4.9%. GD shares have rallied 33.4% in the past year.
Northrop Grumman is a leading provider of full-spectrum cyber security across land, air, sea and space. Its efforts to integrate digital engineering into its tactical missiles business are the key benefits it provides to its customers.
Northrop Grumman boasts a long-term earnings growth rate of 6.2%. The Zacks Consensus Estimate for NOC's 2022 sales indicates growth of 2.6%. Shares of Northrop Grumman have appreciated 44.3% in the past year.
Price Movement
In the past year, shares of Lockheed Martin have rallied 28% against the industry’s declineof 34.9%.
Image: Bigstock
Lockheed (LMT) Inks Deal for 35 F-35 Fighter Jets From Germany
Per major media sources, Lockheed Martin Corporation (LMT - Free Report) recently secured a deal for the supply of 35 F-35 Fighter Jets to Germany amid the ongoing Russia-Ukraine crisis. The move is in sync with Germany’s latest announcement to strengthen its defense structure. This surely bodes well for Lockheed Martin as the F-35 program remains a key catalyst for its Aeronautics business unit’s top line.
Rationale Behind the Deal
The tiff between Russia and Ukraine has resulted in nations increasing their military spending, mainly to upgrade their defense weaponry and arsenals. In this context, it is imperative to mention that Germany recently pledged to increase its defense spending to approximately $845 billion in a bid to protect its country from any sudden war crisis. This defense spending includes a “special fund” of $113 billion solely for armament projects.
Additionally, the recent purchase deal by Germany will also serve the nation’s purpose of replacing its age-old Tornado, which the country earlier decided to replace with Boeing’s F-18. The recent purchase by Germany is likely to boost the revenue growth prospects of LMT’s Aeronautics business unit.
Growing Importance of F-35 in Europe
F-35 enjoys strong demand in Europe. In December 2021, in a bid to replace its fleet of F/A-18 Hornets, Finland announced the purchase of 64 F-35A jets for $11.3 billion. Before this development, in June 2021, Switzerland announced the purchase of 36 F-35A jets. Additionally, apart from Finland and Switzerland, Poland, Denmark, Italy, Norway and the Netherlands are also equipped with one or more F-35 jets.
This exemplifies the growing importance of Lockheed Martin’s F-35 jets in Europe. Also, other European regions may increase their defense spending in the developing threat situation after Russia’s invasion of Ukraine, leading to more inflow of contracts for Lockheed Martin’s F-35 jets, like the latest one.
Opportunities for Peers
As nations increase their defense spending following the latest Russia-Ukraine conflict, defense majors who are likely to benefit from this increased demand for weaponry are Raytheon Technologies (RTX - Free Report) , General Dynamics (GD - Free Report) and Northrop Grumman (NOC - Free Report) .
Raytheon Technologies’ defense business serves both domestic and international customers as a prime contractor or subcontractor on a broad portfolio of defense and related programs for military and government customers.
The long-term earnings growth rate for Raytheonis pegged at 10.2%. Shares of RTX have appreciated 24% in the past year.
General Dynamics offers a broad portfolio of innovative products and services in business aviation, combat vehicles, weapons systems and munitions, IT and C4ISR solutions, and shipbuilding and ship repair.
General Dynamics has a long-term earnings growth rate of 9.6%. The Zacks Consensus Estimate for General Dynamics’ 2022 earnings implies a growth rate of 4.9%. GD shares have rallied 33.4% in the past year.
Northrop Grumman is a leading provider of full-spectrum cyber security across land, air, sea and space. Its efforts to integrate digital engineering into its tactical missiles business are the key benefits it provides to its customers.
Northrop Grumman boasts a long-term earnings growth rate of 6.2%. The Zacks Consensus Estimate for NOC's 2022 sales indicates growth of 2.6%. Shares of Northrop Grumman have appreciated 44.3% in the past year.
Price Movement
In the past year, shares of Lockheed Martin have rallied 28% against the industry’s declineof 34.9%.
Image Source: Zacks Investment Research
Zacks Rank
Lockheed Martin currently carries a Zacks #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.