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Boeing (BA) Wins Contract to Support KC-46 Tanker Aircraft
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The Boeing Company (BA - Free Report) recently clinched a contract to support the KC-46 program. The award has been offered by the Defense Logistics Agency Aviation, Philadelphia, PA.
Valued at $23.2 million, this 18-month contract is expected to get completed by Mar 30, 2024.
Usefulness of KC-46
The KC-46 Pegasus is a wide-body, multirole tanker that can refuel all U.S., allied and coalition military aircraft compatible with international aerial refueling procedures. Boeing initially designed KC-46 to carry passengers, cargo and patients. The aircraft is also equipped to detect, avoid, defeat and survive threats using multiple layers of protection, which will enable it to operate safely in medium-threat environments.
Rising Demand for Combat Jets Aids Boeing
With growing security threats across the globe, emerging economies like the Asia Pacific, the Middle East and South America are spending a lot on enhancing their defense arsenals. Meanwhile, developed nations like the United States and Europe have already been leading the defense market for some time now.
It is imperative to mention in this context that military aircraft, both manned and unmanned, form an integral constituent of a country’s defense products. Notably, emerging trends in the combat aircraft space like the fifth-generation technology aircraft, advanced composite materials, stealth technology and refueling jets like KC-46 have been driving demand substantially.
Being the United States’ largest jet maker, Boeing enjoys a smooth flow of contracts for military jets and their associated upgrades. The latest contract win is an example of the same.
Growth Prospects
Per a Mordor Intelligence report, the global combat aircraft market is expected to witness a CAGR of more than 4% during the 2022-2031 time period, with North America constituting the largest share of this market. This can be attributed to a rise in global threats and geopolitical instabilities as well as increased spending on defense. This should benefit Boeing along with other U.S.-based combat jet manufacturers like Northrop Grumman (NOC - Free Report) , Lockheed Martin (LMT - Free Report) and Textron (TXT - Free Report) .
Lockheed’s Aeronautics business segment is engaged in the research, design, development, manufacture, integration, sustainment, support and upgrade of advanced military aircraft, including combat and air mobility aircraft, unmanned air vehicles, and related technologies. Its major programs include F-35, C-130 Hercules, F-16 Fighting Falcon and F-22 Raptor jets.
Lockheed boasts a long-term earnings growth rate of 5.7%. LMT stock has gained 19.9% in the past year.
Since its inception, Northrop Grumman has been a pioneer in the development of manned aircraft for combat. Northrop Grumman also has a tradition of providing technological leadership in military aviation and aircraft, such as manned, unmanned, targeting, surveillance, and aircraft self-protection systems that enable warfighters to accomplish missions anytime, anywhere and under any conditions.
Northrop Grumman boasts a long-term earnings growth rate of 6.1%. The Zacks Consensus Estimate for NOC’s 2022 sales implies an improvement of 2.6% from the 2021 reported figure.
Textron’s business unit, namely Textron Aviation Defense, designs, builds and supports versatile and globally known military aircraft preferred for training and attack missions. Some of Textron’s renowned products include Beechcraft T-6C trainer and AT-6 Wolverine.
Textron boasts a long-term earnings growth rate of 12.7%. The Zacks Consensus Estimate for TXT’s 2022 sales implies an improvement of 8.2% from the 2021 reported figure.
Price Movement & Zacks Rank
Shares of Boeing have lost 40.6% in the past year compared with the industry’s 33% decline.
Image: Bigstock
Boeing (BA) Wins Contract to Support KC-46 Tanker Aircraft
The Boeing Company (BA - Free Report) recently clinched a contract to support the KC-46 program. The award has been offered by the Defense Logistics Agency Aviation, Philadelphia, PA.
Valued at $23.2 million, this 18-month contract is expected to get completed by Mar 30, 2024.
Usefulness of KC-46
The KC-46 Pegasus is a wide-body, multirole tanker that can refuel all U.S., allied and coalition military aircraft compatible with international aerial refueling procedures. Boeing initially designed KC-46 to carry passengers, cargo and patients. The aircraft is also equipped to detect, avoid, defeat and survive threats using multiple layers of protection, which will enable it to operate safely in medium-threat environments.
Rising Demand for Combat Jets Aids Boeing
With growing security threats across the globe, emerging economies like the Asia Pacific, the Middle East and South America are spending a lot on enhancing their defense arsenals. Meanwhile, developed nations like the United States and Europe have already been leading the defense market for some time now.
It is imperative to mention in this context that military aircraft, both manned and unmanned, form an integral constituent of a country’s defense products. Notably, emerging trends in the combat aircraft space like the fifth-generation technology aircraft, advanced composite materials, stealth technology and refueling jets like KC-46 have been driving demand substantially.
Being the United States’ largest jet maker, Boeing enjoys a smooth flow of contracts for military jets and their associated upgrades. The latest contract win is an example of the same.
Growth Prospects
Per a Mordor Intelligence report, the global combat aircraft market is expected to witness a CAGR of more than 4% during the 2022-2031 time period, with North America constituting the largest share of this market. This can be attributed to a rise in global threats and geopolitical instabilities as well as increased spending on defense. This should benefit Boeing along with other U.S.-based combat jet manufacturers like Northrop Grumman (NOC - Free Report) , Lockheed Martin (LMT - Free Report) and Textron (TXT - Free Report) .
Lockheed’s Aeronautics business segment is engaged in the research, design, development, manufacture, integration, sustainment, support and upgrade of advanced military aircraft, including combat and air mobility aircraft, unmanned air vehicles, and related technologies. Its major programs include F-35, C-130 Hercules, F-16 Fighting Falcon and F-22 Raptor jets.
Lockheed boasts a long-term earnings growth rate of 5.7%. LMT stock has gained 19.9% in the past year.
Since its inception, Northrop Grumman has been a pioneer in the development of manned aircraft for combat. Northrop Grumman also has a tradition of providing technological leadership in military aviation and aircraft, such as manned, unmanned, targeting, surveillance, and aircraft self-protection systems that enable warfighters to accomplish missions anytime, anywhere and under any conditions.
Northrop Grumman boasts a long-term earnings growth rate of 6.1%. The Zacks Consensus Estimate for NOC’s 2022 sales implies an improvement of 2.6% from the 2021 reported figure.
Textron’s business unit, namely Textron Aviation Defense, designs, builds and supports versatile and globally known military aircraft preferred for training and attack missions. Some of Textron’s renowned products include Beechcraft T-6C trainer and AT-6 Wolverine.
Textron boasts a long-term earnings growth rate of 12.7%. The Zacks Consensus Estimate for TXT’s 2022 sales implies an improvement of 8.2% from the 2021 reported figure.
Price Movement & Zacks Rank
Shares of Boeing have lost 40.6% in the past year compared with the industry’s 33% decline.
Image Source: Zacks Investment Research
Boeing currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.