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Boeing (BA) Wins Contract to Support B-1 & B-52 Aircraft

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The Boeing Company (BA - Free Report) recently clinched a modification contract involving B-1 and B-52 bomber aircraft. The deal has been awarded by the Air Force Life Cycle Management, Tinker Air Force Base, OK.

Details of the Deal

Valued at $38.7 million, the contract is projected to be completed by Dec 31, 2023. Per the terms of the deal, Boeing will provide recurring and non-recurring engineering services to B-1 and B-52 aircraft.

With this latest modification, the cumulative value of the contract now stands at $1.20 billion. Work related to the deal will be executed in Edwards AFB, CA; Barksdale AFB, LA; as well as Tinker Air Force Base and Oklahoma City, OK.

Advantages of Boeing’s B-1 & B-52 Bomber

Boeing's B-1 is a long-range, multi-mission, supersonic conventional bomber, which is equipped to carry eight air-launched cruise missiles or 24 SRAMs alongside up to 24 nuclear bombs or 84 500-pound conventional bombs.

The Boeing B-52 primarily provides the U.S. military with immediate nuclear and conventional global strike capabilities. Due to its high mission-capable rate, large payload, long range, persistence and ability to employ nuclear and conventional precision standoff weapons, the B-52 continues to be a critical contributor to the U.S. National Security Strategy.

Growth Prospects

With rising security threats across the globe, emerging economies like South America, the Asia Pacific, and the Middle East are spending a lot on enhancing their defense arsenals. Meanwhile, Europe and the United States have already been leading the defense market. With the United States being the largest worldwide weapons exporter, the nation has been spending amply on defense products. Boeing, the largest aircraft manufacturer in the United States, thus enjoys a dominant position in the combat aircraft market.

Per a Mordor Intelligence report, the global military aviation market is expected to witness a CAGR of 5.3% during the 2022-2028 time period, with North America constituting the largest share of this market. Such growth can be attributed to a rise in global threats and geopolitical instabilities and increased spending on defense. These projections 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) .

Since its inception, Northrop Grumman has been a pioneer in the development of manned aircraft for combat. The company also has a tradition of providing technological leadership in all aspects of military aviation and aircraft, such as manned, unmanned, targeting, surveillance, and aircraft self-protection systems that enable warfighters to accomplish missions anytime and anywhere.

Northrop Grumman has a long-term earnings growth rate of 3.3%. The Zacks Consensus Estimate for NOC’s 2022 sales implies an improvement of 1.6%.

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 Martin boasts a long-term earnings growth rate of 6.2%. The stock has gained 34.8% in the past year.

Textron’s business unit, 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 15.2%. The Zacks Consensus Estimate for TXT’s 2022 sales implies an improvement of 4.1% from the 2021 reported figure.

Price Movement

Shares of Boeing have gained 41.6% in the past six months compared with the industry’s growth of 10.2%.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank

Boeing currently has 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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