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Boeing (BA) Delivers 4 Grey Wolf Helicopters to US Air Force

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The Boeing Company (BA - Free Report) recently announced that it has delivered four MH-139A Grey Wolf test helicopters to the U.S. Air Force, thus assisting the latter in replacing its aging fleet of UH-1N helicopters.

The delivery comes following the $2.4-billion contract Boeing secured in September 2018, which comprised delivering 80 helicopters along with providing training systems and associated support equipment. The helicopters will now undergo Military Utility Testing by the U.S. Air Force as the program progresses toward Milestone C.

Significance of Grey Wolf

The Grey Wolf is a multi-mission aircraft that has been built in line with the capabilities of the proven commercial AW139 helicopter. Moreover, it boasts the features of a modern, versatile aircraft, offering greater range, speed and endurance than the UH-1N Huey.

Additionally, the helicopter has been designed to protect intercontinental ballistic missiles and transport U.S. government officials and security forces.

What’s Favoring Boeing?

Boeing’s leading-edge solutions, coupled with the in-depth experience in constructing military helicopters, have bestowed the company with a steady inflow of orders. The company boasts an impressive portfolio of helicopters that enjoy strong demand in the military landscape.

The MH-139A Grey Wolf apart, its portfolio of helicopters comprises the AH-6 Little Bird, AH-64 Apache, V-22 Osprey and H-47 Chinook aircraft and in-development entrants, including the MH-139A Grey Wolf and DEFIANT X. Such a wide and massive portfolio suggests Boeing’s capability to continuously expand in the military arena with its innovative and superior products.

Against this backdrop, one may safely conclude that BA may witness a continuous flow of orders from the U.S. Air Force involving helicopters, buoyed by its strong product range, which the company offers and assists the army in carrying out military missions efficiently. This, in turn, should boost its revenue generation prospects in the helicopter segment.

Growth Prospects

The bumped-up defense budget of many nations, as a repercussion to the Russian-Ukraine war, has resulted in a surge in demand for military arms and ammunitions of late. This may have led to increased defense spending on military helicopters as well.

Per the report from Mordor Intelligence, the military rotorcraft market is likely to expand at a CAGR of more than 4% during the 2022-2027 period. This is likely to benefit Boeing along with other defense primes like Lockheed Martin (LMT - Free Report) , Textron (TXT - Free Report) and Northrop Grumman (NOC - Free Report) , which enjoy an established position in the military helicopter arena.

Lockheed Martin’s Sikorsky business segment provides military and rotary-wing aircraft for U.S. armed forces along with military services and commercial operators in 40 nations. Some of its product ranges include CH-53K, S-92, UH-60 Black Hawk, etc. Lockheed Martin’slong-term earnings growth rate is pegged at 5.5%. LMT shares have risen 19.9% in the past year.

The long-term earnings growth rate of Lockheed is pegged at 5.5%. Shares of LMT have risen 21.2% in the past year.

Textron’s Bell segment is one of the leading suppliers of military and commercial helicopters, tiltrotor aircraft, and related spare parts and services in the world. Its military helicopter product range includes Bell 360, Bell V-280, Bell AH-1Z, Bell UH-1Y, Bell Huey II and Bell V-22.

TXT stock boasts a long-term earnings growth rate of 12.5%. Shares of Textron have appreciated 1.4% in the past three months.

Northrop Grumman’s Fire Scout is a combat-proven, autonomous helicopter system providing real-time intelligence, surveillance, reconnaissance and target-acquisition, laser designation and battle management for tactical users without relying on manned aircraft or space-based assets. It’s available in two variants – MQ-8B Fire Scout and MQ-8C Fire Scout.

Northrop Grumman has a long-term earnings growth rate of 2.2%. NOC’s investors have gained 25.6% in the past year.

Price Performance

Shares of Boeing have rallied 32.4% in the past three months compared with the industry’s rise of 5.3%.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank

BA 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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