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General Dynamics (GD) Wins $18.1M Deal for Trident II SWS

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General Dynamics Corporation’s (GD - Free Report) business unit, Mission Systems, recently clinched a contract to provide the Trident II Strategic Weapon System (“SWS”) Kings Bay Trident Trainer Facility kit and engineering support services. The deal has been awarded by the Strategic Systems Programs, Washington, D.C.

Valued at $18.1 million, the contract is expected to conclude by Dec 31, 2025.  The work related to the contract will be carried out at multiple locations, with the majority in Groton, CT.

Significance of Trident II

Trident II D5 is the latest generation of the U.S. Navy's submarine-launched fleet ballistic missiles, following the highly successful Polaris, Poseidon and Trident I C4 programs.

Trident missiles are carried by 14 U.S. Navy Ohio-class submarines with American warheads and four Royal Navy Vanguard-class submarines with British warheads.

Due to its remarkable features, which are well-suited for any military mission, the Trident missile is projected to enjoy a steady inflow of orders. This may benefit General Dynamics as it may continue to witness an inflow of orders involving SWS services for the missile. The latest contract win is a testament to the same. This will bolster GD’s revenues from the missile strategic weapon system business line.

Growth Prospects

Nations have increased their defense spending on military equipment and various arsenals to strengthen their defense capabilities. The surge in the demand for defense products is primarily due to rising geopolitical tensions and amplified terrorist threats. Hence, military missiles, an integral part of any defense system, have registered growth in demand.

In this context, per the report from Mordor Intelligence, the missiles and missile defense system market is projected to witness a CAGR of 4.9% during the 2022-2027 period. Such abounding growth trends indicate ample growth opportunities for General Dynamics as it enjoys a lucrative position in the missile market.

A few defense primes that can reap the benefits of the aforementioned market are Northrop Grumman (NOC - Free Report) , Raytheon Technologies (RTX - Free Report) and Lockheed Martin (LMT - Free Report) .

Northrop Grumman designs and produces missile products, including advanced high-speed propulsion systems, fuses, warheads and controls for air, sea and land-based systems.

Northrop boasts a long-term earnings growth rate of 2.2%. NOC shares have returned 36.4% in the past year.

Raytheon’s Missiles & Defense is a leading designer, developer, integrator, producer and sustainer of integrated air and missile defense systems, with the unit serving as a prime contractor or major subcontractor on numerous missile and related programs with the U.S. Department of Defense.

Raytheon’s long-term earnings growth rate is pegged at 10.4%. The Zacks Consensus Estimate for RTX’s 2022 earnings suggests a growth rate of 9.1% from the prior-year reported figure.

Lockheed Martin’s Missiles and Fire Control (“MFC”) is a recognized designer, developer and manufacturer of precision engagement aerospace and defense systems for the United States and allied militaries.

MFC develops, manufactures and supports advanced combat, missile, rocket, manned and unmanned systems for military customers. These include the U.S. Army, Navy, Air Force, Marine Corps, NASA and dozens of foreign allies.

Lockheed Martin’s long-term earnings growth rate is pegged at 5.5%. Shares of LMT have returned 6.7% value to investors in the past year.

Price Performance

Shares of General Dynamics have rallied 7.1% in the past year against the industry’s decline of 23.4%.

Zacks Investment Research
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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.

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