Over the past week, a generous flow of contracts from the Pentagon is likely to have 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 0.5%, while the Dow Jones U.S. Aerospace & Defense index rose 3.1% in the aforementioned time period.
Among the past week’s highlights, defense majors namely
Raytheon Technologies ( RTX Quick Quote RTX - Free Report) , Lockheed Martin ( LMT Quick Quote LMT - Free Report) and Huntington Ingalls ( HII Quick Quote HII - Free Report) secured a number of notable deals from the Department of Defense’s daily funding session. Meanwhile, Teledyne Technologies ( TDY Quick Quote TDY - Free Report) came up with a new product. Recap of Past Week’s Important Stories
Raytheon Technologies’ business unit, Pratt and Whitney secured a modification contract, worth $4.39 billion, involving F135 propulsion systems. The Naval Air Systems Command, Patuxent River, MD, has offered the award. This latest modification adds scope for the production and delivery of F-35 Lighting II Joint Strike Fighter propulsion systems, including 152 F135-PW-100 and 26 F135-PW-600 propulsion systems. The contract is scheduled to be completed by September 2024 (read more: Raytheon Wins $4.4B Deal for F-135 Propulsion Systems). Meanwhile, the company’s Missile Systems clinched a contract for manufacturing and assembly of Standard Missile-3 Block IIA All-Up Rounds. The contract has been offered by the Missile Defense Agency, Dahlgren, VA. Valued at $866.6 million, this contract is projected to be completed by Dec 31, 2026. The work related to the deal will be executed in Tucson, AZ and Huntsville, AL (read more: Raytheon Wins $867M Deal to Build SM-3 Block IIA Rounds). 2. Lockheed’s business unit, Aeronautics has won a modification contract worth $578.2 million involving the F-35 Joint Strike Fighter program. The Naval Air Systems Command, Patuxent River, MD, has offered the award. Per the terms, Lockheed will offer program management support, non-recurring unique requirements, and training for continued integration efforts on the F-35 fighter jet program (read more: Lockheed Wins $578M Deal to Support F-35 Jet Program). The company secured another contract worth $450 million to provide production support for Joint Air-to-Surface Standoff Missile (JASSM). The Air Force Life Cycle Management Center, Eglin Air Force Base, FL awarded the deal. Per the terms, Lockheed will provide lifecycle support for all efforts related to JASSM in the areas of system upgrades, integration, production, sustainment, management and logistical support (read more: Lockheed Wins $450M Deal to Support JASSM Program). 3. Huntington’s business segment, Ingalls Shipbuilding clinched a modification contract involving the design and construction of landing platform dock (“LPD”) 32. The Naval Sea Systems Command Washington, D.C., offered the award. Valued at $240 million, the contract is projected to be completed by December 2024. This contract modification includes options, which, if exercised, would bring its cumulative value to $1.56 billion (read more: Huntington Ingalls Wins $240M Deal to Build LPD 32). 4. Teledyne Technologies’ business unit, Teledyne FLIR unveiled its Kobra 725 modular robot, which offers enhanced and technologically advanced features compared to the Kobra 710 unmanned ground system. The newly launched Kobra 725 comes with a series of upgrades and enhancements that will aid in effortless military expeditions. Additionally, at less than 250 kg, the rugged Kobra 725 is highly maneuverable, even in rough terrain, and can climb stairs and even surmount jersey barriers (read more: Teledyne's FLIR Unveils New Modular Robot Kobra 725). Performance
Over the past five trading sessions, the defense biggies put up a dismal show except Textron. While Lockheed, Boeing gained, General Dynamics, L3Harris Technologies and Textron’s shares lost.
In the last six months, the industry's performance was mostly impressive, except that for Boeing and Textron. Lockheed gained the most with a 23% surge in share price, followed by Northrop. The following table shows the price movement of the major defense players over the past five trading days and during the last six months.
Company Past Week Last 6 Months LMT 4.50% 22.95% BA 18.03% -31.46% GD -0.45% 6.52% RTX 1.04% 11.04% NOC 0.67% 22.53% TXT -0.58% -20.47% LHX -1.56% 10.85%