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Lockheed (LMT) Wins $50M Deal to Aid THAAD PAC-3 MSE Program
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Lockheed Martin Corp.’s (LMT - Free Report) business segment, Missiles and Fire Control recently clinched a contract involving Terminal High Altitude Air Defense (THAAD) Patriot Advanced Capability-3 (PAC-3) missile segment enhancement (MSE). The award has been offered by the U.S. Army Contracting Command, Redstone Arsenal, AL.
Details of the Deal
Valued at $50 million, the contract is projected to be completed by Dec 31, 2025. Per the terms of the deal, Lockheed will offer associated engineering support for development of THAAD PAC-3 MSE component.
Work related to this deal will be executed in Grand Prairie, TX.
What’s Favoring Lockheed?
Increasing geopolitical and socioeconomic turmoil worldwide has prompted nations, both developed and developing, to expand their respective military arsenal, with missiles constituting a significant portion of that inventory.
Lockheed’s Missiles and Fire Control business unit develops, manufactures and supports advanced combat missiles and rockets for military customers, including the U.S. Army, Navy, Air Force, Marine Corps, NASA and dozens of foreign allies. Some of its prominent products include the PAC-3 missile, Terminal High Altitude Area Defense missile, JASSM, LRASM and many more.
In March 2022, Lockheed successfully integrated the THAAD Weapon System with PAC-3 MSE. This integration allows the PAC-3 MSE interceptor to launch earlier, thereby significantly expanding the MSE defended area. Such developments increase the chances of Lockheed’s missiles being selected by Pentagon, with the U.S. administration steadily boosting the nation’s defense spending. The latest contract win is a bright example of that.
Growth Prospects
The global rocket and missiles market is projected to reach $82.0 billion by 2031. It is also anticipated to witness a CAGR of 4.2% during 2022-2031, per a report by Allied Market Research firm.
Such projections reflect increased growth opportunities for major missile players like Lockheed, Raytheon (RTX - Free Report) , Northrop Grumman (NOC - Free Report) and Boeing (BA - Free Report) in the aforementioned market.
Notably, Raytheon offers a variety of combat-proven missile defense systems, including the Patriot missile, Standard Missile-6, Standard Missile-3, Advanced Medium-Range Air-to-Air Missile, Evolved Seasparrow Missile, Tomahawk cruise missile and a few more.
Raytheon boasts a long-term earnings growth rate of 8.3%. The Zacks Consensus Estimate for its 2023 sales implies an improvement of 8.3% from the 2022 reported figure.
Northrop manufactures a variety of air, sea and land-based missile systems’ propulsion control systems that support the U.S. Missile Defense Agency. It also produces airborne missile warning systems as well as medium-class solid rocket motors for the U.S. Navy's Trident II Fleet Ballistic Missile program.
NOC boasts a long-term earnings growth rate of 3.8%. The Zacks Consensus Estimate for its 2023 sales indicates growth of 4.7% from the 2022 reported figure.
Boeing’s missile defense capabilities provide defensive and strategic systems that protect the homeland and deployed forces. The company’s systems within the Integrated Air & Missile Defense portfolio include Arrow 3, which offers regional missile defense capabilities to enable an effective response to short and medium-range ballistic missiles.
BA boasts a long-term earnings growth rate of 4%. The Zacks Consensus Estimate for its 2023 sales implies an improvement of 18.3% from the 2022 reported figure.
Price Movement and Zacks Rank
Shares of Lockheed have gained 12.7% in the past year compared with the industry's rise of 4.3%.
Image: Bigstock
Lockheed (LMT) Wins $50M Deal to Aid THAAD PAC-3 MSE Program
Lockheed Martin Corp.’s (LMT - Free Report) business segment, Missiles and Fire Control recently clinched a contract involving Terminal High Altitude Air Defense (THAAD) Patriot Advanced Capability-3 (PAC-3) missile segment enhancement (MSE). The award has been offered by the U.S. Army Contracting Command, Redstone Arsenal, AL.
Details of the Deal
Valued at $50 million, the contract is projected to be completed by Dec 31, 2025. Per the terms of the deal, Lockheed will offer associated engineering support for development of THAAD PAC-3 MSE component.
Work related to this deal will be executed in Grand Prairie, TX.
What’s Favoring Lockheed?
Increasing geopolitical and socioeconomic turmoil worldwide has prompted nations, both developed and developing, to expand their respective military arsenal, with missiles constituting a significant portion of that inventory.
Lockheed’s Missiles and Fire Control business unit develops, manufactures and supports advanced combat missiles and rockets for military customers, including the U.S. Army, Navy, Air Force, Marine Corps, NASA and dozens of foreign allies. Some of its prominent products include the PAC-3 missile, Terminal High Altitude Area Defense missile, JASSM, LRASM and many more.
In March 2022, Lockheed successfully integrated the THAAD Weapon System with PAC-3 MSE. This integration allows the PAC-3 MSE interceptor to launch earlier, thereby significantly expanding the MSE defended area. Such developments increase the chances of Lockheed’s missiles being selected by Pentagon, with the U.S. administration steadily boosting the nation’s defense spending. The latest contract win is a bright example of that.
Growth Prospects
The global rocket and missiles market is projected to reach $82.0 billion by 2031. It is also anticipated to witness a CAGR of 4.2% during 2022-2031, per a report by Allied Market Research firm.
Such projections reflect increased growth opportunities for major missile players like Lockheed, Raytheon (RTX - Free Report) , Northrop Grumman (NOC - Free Report) and Boeing (BA - Free Report) in the aforementioned market.
Notably, Raytheon offers a variety of combat-proven missile defense systems, including the Patriot missile, Standard Missile-6, Standard Missile-3, Advanced Medium-Range Air-to-Air Missile, Evolved Seasparrow Missile, Tomahawk cruise missile and a few more.
Raytheon boasts a long-term earnings growth rate of 8.3%. The Zacks Consensus Estimate for its 2023 sales implies an improvement of 8.3% from the 2022 reported figure.
Northrop manufactures a variety of air, sea and land-based missile systems’ propulsion control systems that support the U.S. Missile Defense Agency. It also produces airborne missile warning systems as well as medium-class solid rocket motors for the U.S. Navy's Trident II Fleet Ballistic Missile program.
NOC boasts a long-term earnings growth rate of 3.8%. The Zacks Consensus Estimate for its 2023 sales indicates growth of 4.7% from the 2022 reported figure.
Boeing’s missile defense capabilities provide defensive and strategic systems that protect the homeland and deployed forces. The company’s systems within the Integrated Air & Missile Defense portfolio include Arrow 3, which offers regional missile defense capabilities to enable an effective response to short and medium-range ballistic missiles.
BA boasts a long-term earnings growth rate of 4%. The Zacks Consensus Estimate for its 2023 sales implies an improvement of 18.3% from the 2022 reported figure.
Price Movement and Zacks Rank
Shares of Lockheed have gained 12.7% in the past year compared with the industry's rise of 4.3%.
Image Source: Zacks Investment Research
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.