We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
General Dynamics (GD) Arm Wins $1.2B Deal to Supply Abrams Tank
Read MoreHide Full Article
General Dynamics Corporation’s (GD - Free Report) business unit, Land Systems, recently clinched a $1.15-billion contract involving the supply of Abrams main battle tanks to Poland from the U.S. Army.
Per the deal, GD will deliver 250 M1A2 SEPv3 Abrams main battle tanks to Poland under the Foreign Military Sales order.
Significance of Abrams Tank
The M1A2 SEPv3 Abrams is the most advanced main battle tank. It boasts features that are technologically advanced in communications, fire control and lethality, reliability, sustainment and fuel efficiency along with an upgraded armor. Additionally, the SEPv3 Abrams is designed to seamlessly accept future upgrades.
What’s Favoring General Dynamics?
Military tanks are the primary offensive weapons in the land mission of the military. An efficient armored military tank enables the army to carry out any mission by direct fire. Moreover, the recent tiff between Ukraine and Russia has accelerated the pace of upgrading the defense landscape with technologically advanced arms and ammunitions, which, in turn, has led to increased investments in military tanks.
In this context, it is imperative to mention that the increased focus on technologically advanced combat vehicles is likely to benefit General Dynamics as its Land System business unit is a prime contractor of land combat vehicles for the U.S Navy. It provides innovative design, engineering, technology, production and full life-cycle support for land combat vehicles worldwide.
Interestingly, its excellence and in-depth experience in building combat vehicles, coupled with a customer-first focus and a seasoned supply-chain network, have been leveraging the company in winning multiple contracts from the U.S. Army and its allies. The latest contract win is a bright example of that.
Such a trend in demand is likely to bolster GD’s revenue generation prospects from its Land System business unit and may provide a boost for its overall top line.
Growth Prospects
The changing dynamics of the military landscape and the rising geopolitical tension make it mandatory for a country to continuously evolve and strengthen its defense structure. To this end, military tanks form an integral part of any military missions and arm them in their land warfare affairs.
In this context, per the report from Markets and Markets, the global armored vehicle market is projected to witness a CAGR of 5.8% during the 2020-2025 period. Such abounding growth trends indicate ample growth opportunities for General Dynamics as it enjoys a lucrative position in the armored vehicle market.
A few defense primes that can reap the multitude of gains from the expanding armored vehicle market are BAE Systems (BAESY - Free Report) , Northrop Grumman (NOC - Free Report) and Raytheon Technologies (RTX - Free Report) .
BAE System’s Challenger 2 is heavily armored and highly mobile, designed for use in the direct fire zone. Its primary role is to destroy or neutralize the armor. It also has the ability to engage both hard and soft targets and can operate across a spectrum of high-intensity conflicts, counter insurgencies and peacekeeping roles.
The long-term earnings growth rate of BAESY is pegged at 9.3%. Shares of BAE Systems have rallied 21.1% in the past year.
Northrop Grumman is the world’s top producer of medium-caliber live and training ammunition and gun systems, with more than five million units built in the last five years. It specializes in innovating low-cost, highly reliable precise weapons and ammunition for artillery and mortar systems, medium-caliber weapon platforms, battle tanks and individual soldiers.
Northrop Grumman has a long-term earnings growth rate of 2.2%. NOC’s investors have gained 32% in the past year.
Raytheon is currently teaming up with American Rheinmetall Vehicles to meet the U.S. Army’s current requirement for a true, next-generation Optionally Manned Fighting Vehicle, namely the Lynx Infantry Fighting Vehicle. The Lynx Infantry Fighting Vehicle is a next-generation, tracked, armored fighting vehicle designed to address the critical challenges of the future battlefield.
Raytheon’s long-term earnings growth rate is pegged at 10.4%. RTX shares have returned 10.3% in the past year.
Price Performance
Shares of General Dynamics have rallied 16.8% in the past year against the the industry’s decline of 32.4%.
Image: Bigstock
General Dynamics (GD) Arm Wins $1.2B Deal to Supply Abrams Tank
General Dynamics Corporation’s (GD - Free Report) business unit, Land Systems, recently clinched a $1.15-billion contract involving the supply of Abrams main battle tanks to Poland from the U.S. Army.
Per the deal, GD will deliver 250 M1A2 SEPv3 Abrams main battle tanks to Poland under the Foreign Military Sales order.
Significance of Abrams Tank
The M1A2 SEPv3 Abrams is the most advanced main battle tank. It boasts features that are technologically advanced in communications, fire control and lethality, reliability, sustainment and fuel efficiency along with an upgraded armor. Additionally, the SEPv3 Abrams is designed to seamlessly accept future upgrades.
What’s Favoring General Dynamics?
Military tanks are the primary offensive weapons in the land mission of the military. An efficient armored military tank enables the army to carry out any mission by direct fire. Moreover, the recent tiff between Ukraine and Russia has accelerated the pace of upgrading the defense landscape with technologically advanced arms and ammunitions, which, in turn, has led to increased investments in military tanks.
In this context, it is imperative to mention that the increased focus on technologically advanced combat vehicles is likely to benefit General Dynamics as its Land System business unit is a prime contractor of land combat vehicles for the U.S Navy. It provides innovative design, engineering, technology, production and full life-cycle support for land combat vehicles worldwide.
Interestingly, its excellence and in-depth experience in building combat vehicles, coupled with a customer-first focus and a seasoned supply-chain network, have been leveraging the company in winning multiple contracts from the U.S. Army and its allies. The latest contract win is a bright example of that.
Such a trend in demand is likely to bolster GD’s revenue generation prospects from its Land System business unit and may provide a boost for its overall top line.
Growth Prospects
The changing dynamics of the military landscape and the rising geopolitical tension make it mandatory for a country to continuously evolve and strengthen its defense structure. To this end, military tanks form an integral part of any military missions and arm them in their land warfare affairs.
In this context, per the report from Markets and Markets, the global armored vehicle market is projected to witness a CAGR of 5.8% during the 2020-2025 period. Such abounding growth trends indicate ample growth opportunities for General Dynamics as it enjoys a lucrative position in the armored vehicle market.
A few defense primes that can reap the multitude of gains from the expanding armored vehicle market are BAE Systems (BAESY - Free Report) , Northrop Grumman (NOC - Free Report) and Raytheon Technologies (RTX - Free Report) .
BAE System’s Challenger 2 is heavily armored and highly mobile, designed for use in the direct fire zone. Its primary role is to destroy or neutralize the armor. It also has the ability to engage both hard and soft targets and can operate across a spectrum of high-intensity conflicts, counter insurgencies and peacekeeping roles.
The long-term earnings growth rate of BAESY is pegged at 9.3%. Shares of BAE Systems have rallied 21.1% in the past year.
Northrop Grumman is the world’s top producer of medium-caliber live and training ammunition and gun systems, with more than five million units built in the last five years. It specializes in innovating low-cost, highly reliable precise weapons and ammunition for artillery and mortar systems, medium-caliber weapon platforms, battle tanks and individual soldiers.
Northrop Grumman has a long-term earnings growth rate of 2.2%. NOC’s investors have gained 32% in the past year.
Raytheon is currently teaming up with American Rheinmetall Vehicles to meet the U.S. Army’s current requirement for a true, next-generation Optionally Manned Fighting Vehicle, namely the Lynx Infantry Fighting Vehicle. The Lynx Infantry Fighting Vehicle is a next-generation, tracked, armored fighting vehicle designed to address the critical challenges of the future battlefield.
Raytheon’s long-term earnings growth rate is pegged at 10.4%. RTX shares have returned 10.3% in the past year.
Price Performance
Shares of General Dynamics have rallied 16.8% in the past year against the the industry’s decline of 32.4%.
Image Source: Zacks Investment Research
Zacks Rank
General Dynamics currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.