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.
L3Harris (LHX) Secures Modification Contract to Aid Submarines
Read MoreHide Full Article
L3Harris Technologies, Inc. (LHX - Free Report) recently clinched a modification contract involving in-service class submarines. The award has been provided by the Naval Sea Systems Command, Washington, D.C.
Valued at $39.3 million, the contract is projected to be completed by July 2027. Per the terms of the deal, L3Harris will procure production hardware to support new construction and in-service class submarines. The majority of the work related to this deal will be carried out in Northampton, MA.
What’s Favoring L3Harris?
L3Harris, being one of the major providers of engineering and fleet technical support for the U.S. submarine force for more than 20 years, stands to benefit from the increased demand for submarines. The heightened necessity to enhance maritime warfare capabilities has driven a surge in defense expenditures focused on submarines.
Per the report from the Mordor Intelligence firm, the submarine market is poised to witness a CAGR of 4% over the 2023-2028 period. The expanding submarine market should benefit LHX by creating opportunities for more contract inflows in the realm of engineering and support services, like the latest one. This should bolster the revenue generation prospects of the company.
Peer Prospects
Considering the aforementioned market growth, L3Harris’ growth prospects seem solid. The expanding submarine market should also benefit defense players in the industry like BAE Systems (BAESY - Free Report) , Huntington Ingalls Industries (HII - Free Report) and General Dynamics (GD - Free Report) that have exposure in this submarine market.
General Dynamics’ 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 8.9%. Its investors have gained 8.4% in the past three months.
BAE Systems’ Astute class is the largest and most advanced attack submarine for the U.K. Royal Navy. Equipped with world-leading sensors, the Astute class carries both Tomahawk Land Attack Cruise Missiles and Spearfish Heavyweight Torpedoes.
The Zacks Consensus Estimate for BAE Systems’ 2023 sales suggests a growth rate of 15.7% from the prior-year reported figure. Its shares have rallied 32.1% in the past year.
Huntington Ingalls’ Newport News Shipbuilding is one of the two designers and builders of nuclear-powered submarines for the U.S. Navy. It provides fleet services to submarines worldwide, offering modernization, repair and installation services. NNS is a major shipbuilding partner in the Columbia-class program and the Virginia-class submarine program.
The Zacks Consensus Estimate for Huntington’s 2023 earnings suggests a growth rate of 0.2% from the prior-year reported figure. The consensus estimate for HII’s 2023 sales indicates a growth rate of 3.2% from the prior-year reported figure.
Price Movement
In the past three months, shares of L3Harris have decreased 2% compared with the industry’s 1% decline.
Image: Bigstock
L3Harris (LHX) Secures Modification Contract to Aid Submarines
L3Harris Technologies, Inc. (LHX - Free Report) recently clinched a modification contract involving in-service class submarines. The award has been provided by the Naval Sea Systems Command, Washington, D.C.
Valued at $39.3 million, the contract is projected to be completed by July 2027. Per the terms of the deal, L3Harris will procure production hardware to support new construction and in-service class submarines. The majority of the work related to this deal will be carried out in Northampton, MA.
What’s Favoring L3Harris?
L3Harris, being one of the major providers of engineering and fleet technical support for the U.S. submarine force for more than 20 years, stands to benefit from the increased demand for submarines. The heightened necessity to enhance maritime warfare capabilities has driven a surge in defense expenditures focused on submarines.
Per the report from the Mordor Intelligence firm, the submarine market is poised to witness a CAGR of 4% over the 2023-2028 period. The expanding submarine market should benefit LHX by creating opportunities for more contract inflows in the realm of engineering and support services, like the latest one. This should bolster the revenue generation prospects of the company.
Peer Prospects
Considering the aforementioned market growth, L3Harris’ growth prospects seem solid. The expanding submarine market should also benefit defense players in the industry like BAE Systems (BAESY - Free Report) , Huntington Ingalls Industries (HII - Free Report) and General Dynamics (GD - Free Report) that have exposure in this submarine market.
General Dynamics’ 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 8.9%. Its investors have gained 8.4% in the past three months.
BAE Systems’ Astute class is the largest and most advanced attack submarine for the U.K. Royal Navy. Equipped with world-leading sensors, the Astute class carries both Tomahawk Land Attack Cruise Missiles and Spearfish Heavyweight Torpedoes.
The Zacks Consensus Estimate for BAE Systems’ 2023 sales suggests a growth rate of 15.7% from the prior-year reported figure. Its shares have rallied 32.1% in the past year.
Huntington Ingalls’ Newport News Shipbuilding is one of the two designers and builders of nuclear-powered submarines for the U.S. Navy. It provides fleet services to submarines worldwide, offering modernization, repair and installation services. NNS is a major shipbuilding partner in the Columbia-class program and the Virginia-class submarine program.
The Zacks Consensus Estimate for Huntington’s 2023 earnings suggests a growth rate of 0.2% from the prior-year reported figure. The consensus estimate for HII’s 2023 sales indicates a growth rate of 3.2% from the prior-year reported figure.
Price Movement
In the past three months, shares of L3Harris have decreased 2% compared with the industry’s 1% decline.
Image Source: Zacks Investment Research
Zacks Rank
L3Harris currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.