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Lockheed Martin (LMT) Wins $73.1M Deal to Support Submarines
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Lockheed Martin Corp. (LMT - Free Report) recently clinched a contract for the procurement of submarine modernization kits, equipment and installation. The deal has been awarded by the Naval Sea Systems Command, Washington, D.C.
Valued at $73.1 million, the contract is expected to be complete by August 2025. The work related to this deal will be carried out in Syracuse, NY.
What’s Favoring Lockheed Martin?
The rise in security threats and the changing dynamics of the defense world have led to increased defense spending by nations on weapons and arms, highlighting the fortified demand for defense products for defense companies. In this context, amplified spending on military submarines and related parts has also been witnessed to advance high-end tactical undersea warfare capabilities.
The U.S. fiscal 2024 defense budget proposal highlights $48.1 billion worth of investments for sea power. These include the construction of warships and submarines. Consequently, this should benefit LMT as the company designs, develops and integrates submarine combat systems for the United States, the United Kingdom, Canada, Brazil, Spain and others.
Going forward, per the report from Mordor Intelligence, the global submarine market is projected to witness a CAGR of 4% over the 2022-2031 period.
Such probable growth prospects exemplify immense opportunities for companies like Lockheed Martin to win multiple contracts involving submarines and related parts, like the latest one. This should bolster the revenue generation prospects of the company from the submarine line of business.
Peer Prospects
Apart from Lockheed Martin, defense companies that are likely to reap the benefits of additional spending on submarines and a probable inflow of orders are as follows:
General Dynamics’ (GD - Free Report) Marine Systems segment is the leading designer and builder of nuclear-powered submarines. The company is investing $1.8 billion of capital in expanded and modernized facilities at Electric Boat to support growth in submarine construction.
General Dynamics has a long-term earnings growth rate of 3.5%. Its investors have gained 2.6% in the past six months.
Northrop Grumman’s (NOC - Free Report) seabed-to-space advanced multi-domain maritime capabilities enable current and future maritime missions. The company has systems and sensors fielded on Virginia class submarines, while its WSN-7 is an inertial navigator that allows for precise navigation and aiming of weapons in ships and submarines to operate in areas where GPS is denied.
Northrop’s long-term earnings growth rate is pegged at 3.5%. Shares of NOC have returned 2.9% value to its investors in the past year.
Raytheon Technologies’ (RTX - Free Report) Collins Aerospace business unit delivers products for all U.S. Navy classes of submarines. Its product expertise and field services are supporting U.S. Navy submarines. Its power generation and environmental control and life support systems also support the Spanish Navy’s S-80 Submarine, the UK Navy’s Astute, Vanguard, and upcoming Dreadnought classes and Japanese Maritime Self-Defense Force Oyashio Class submarines.
Raytheon boasts a long-term earnings growth rate of 8.3%. RTX stock has appreciated 20% in the past six months.
Price Movement
In the past year, shares of Lockheed Martin have increased 7% against the industry’s fall of 7.8%.
Image: Bigstock
Lockheed Martin (LMT) Wins $73.1M Deal to Support Submarines
Lockheed Martin Corp. (LMT - Free Report) recently clinched a contract for the procurement of submarine modernization kits, equipment and installation. The deal has been awarded by the Naval Sea Systems Command, Washington, D.C.
Valued at $73.1 million, the contract is expected to be complete by August 2025. The work related to this deal will be carried out in Syracuse, NY.
What’s Favoring Lockheed Martin?
The rise in security threats and the changing dynamics of the defense world have led to increased defense spending by nations on weapons and arms, highlighting the fortified demand for defense products for defense companies. In this context, amplified spending on military submarines and related parts has also been witnessed to advance high-end tactical undersea warfare capabilities.
The U.S. fiscal 2024 defense budget proposal highlights $48.1 billion worth of investments for sea power. These include the construction of warships and submarines. Consequently, this should benefit LMT as the company designs, develops and integrates submarine combat systems for the United States, the United Kingdom, Canada, Brazil, Spain and others.
Going forward, per the report from Mordor Intelligence, the global submarine market is projected to witness a CAGR of 4% over the 2022-2031 period.
Such probable growth prospects exemplify immense opportunities for companies like Lockheed Martin to win multiple contracts involving submarines and related parts, like the latest one. This should bolster the revenue generation prospects of the company from the submarine line of business.
Peer Prospects
Apart from Lockheed Martin, defense companies that are likely to reap the benefits of additional spending on submarines and a probable inflow of orders are as follows:
General Dynamics’ (GD - Free Report) Marine Systems segment is the leading designer and builder of nuclear-powered submarines. The company is investing $1.8 billion of capital in expanded and modernized facilities at Electric Boat to support growth in submarine construction.
General Dynamics has a long-term earnings growth rate of 3.5%. Its investors have gained 2.6% in the past six months.
Northrop Grumman’s (NOC - Free Report) seabed-to-space advanced multi-domain maritime capabilities enable current and future maritime missions. The company has systems and sensors fielded on Virginia class submarines, while its WSN-7 is an inertial navigator that allows for precise navigation and aiming of weapons in ships and submarines to operate in areas where GPS is denied.
Northrop’s long-term earnings growth rate is pegged at 3.5%. Shares of NOC have returned 2.9% value to its investors in the past year.
Raytheon Technologies’ (RTX - Free Report) Collins Aerospace business unit delivers products for all U.S. Navy classes of submarines. Its product expertise and field services are supporting U.S. Navy submarines. Its power generation and environmental control and life support systems also support the Spanish Navy’s S-80 Submarine, the UK Navy’s Astute, Vanguard, and upcoming Dreadnought classes and Japanese Maritime Self-Defense Force Oyashio Class submarines.
Raytheon boasts a long-term earnings growth rate of 8.3%. RTX stock has appreciated 20% in the past six months.
Price Movement
In the past year, shares of Lockheed Martin have increased 7% against the industry’s fall of 7.8%.
Image Source: Zacks Investment Research
Zacks Rank
Lockheed Martin currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.