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BAE Systems (BAESY) Wins Deal for Amphibious Combat Vehicles

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BAE Systems plc’s (BAESY - Free Report) business unit, BAE Systems Land & Armaments L.P., recently clinched a modification contract involving Amphibious Combat Vehicles (ACVs). Valued at $87.9 million, the contract is projected to be completed in July 2025.

Details of the Deal

The deal has been awarded by the Marine Corps Systems Command, Quantico, VA. Per the terms, BAE Systems is accountable for the procurement of labor and material for the ACV Mission Role Variant Medium-Caliber Cannon (ACV-30) for post-critical design, review and development. The contract also includes production representative test vehicles and support for test activities.

The work involved in the deal will be carried out at multiple locations across the United States.

Growth Prospects for BAE Systems

BAE Systems’ ACV is designed in a way that can fulfill the complex mission objective of deploying Marines from the ship to the shore. It represents a unique mix of true open-ocean amphibious capability, land mobility, survivability, payload and exhibits tremendous growth potential to accommodate the evolving operational needs of the United States Marine Corps (“USMC”).

Additionally, from its family of ACV, ACV-30 mounts a stabilized, medium-caliber weapon system that tends to provide the lethality and protection the Marines need while leaving ample room for troop capacity and payload. This may have attracted the USMC and thus resulted in multiple contract wins for BAE Systems. The latest contract win is a treatment to that.

Per the report from Research and Markets, the military amphibious vehicle market is projected to expand at a CAGR of 6% during the 2022-2027 period.

Such growth opportunities for the military amphibious vehicle market are likely to benefit BAESY going forward, and the company may continue to witness a steady flow of contracts from the USMC involving the ACV, which, in turn, should boost its revenue generation prospects.

Price Movement

In the past year, shares of BAE Systems have rallied 22.1% compared with the industry’s growth of 8.8%.


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Zacks Rank

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