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Lockheed (LMT) Wins Contract to Aid Missile Flight Testing
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Lockheed Martin Corp.’s (LMT - Free Report) business segment, Space, recently clinched a modification contract involving support for missile flight test demonstrations. The award has been offered by the Strategic Systems Programs, Washington, D.C.
Details of the Deal
Valued at $315.9 million, the contract is projected to be completed by Feb 25, 2025. Per the terms of the deal, Lockheed will provide design, development, build, and integration of equipment for missile flight test demonstrations and fielding.
Majority of the work related to this contract will be carried out in Littleton, CO.
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.
Notably, Lockheed’s Space business unit, apart from developing satellites and space transportation system, also builds strike missile as well as missile defense systems. Its major programs include Trident II D5 Fleet Ballistic Missile, a program with the U.S. Navy for the only submarine-launched intercontinental ballistic missile currently in production in the United States. The unit also designs Next Generation Interceptor, a program with the Missile Defense Agency, utilizing next generation propulsion and sensors to provide homeland missile defense. As one of the major missile makers in the United States and with such remarkable missile systems in its product portfolio, Lockheed enjoys a strong demand base in the missile defense market. The latest contract win is a bright example of that.
Growth Prospects
Per a report from Mordor Intelligence, the missiles and missile defense system market is anticipated to witness a CAGR of 4.8% during the 2023-2028 period. Such an expanding market is likely to benefit LMT as it enjoys a solid position in the military missile market.
Some other prominent defense majors that have a strong position in the missile and associated parts manufacturing industry and are thus also likely to enjoy the perks of the expanding missile defense market are discussed below.
Northrop Grumman (NOC - Free Report) is a prominent developer of missile systems and counter systems, including strategic deterrents, subsystems and components. To strengthen its position in the missile market, Northrop acquired Orbital ATK in 2018, which used to be one of the industry leaders in providing missile components across air, sea and land-based systems.
The company has a long-term earnings growth rate of 4.1%. The Zacks Consensus Estimate for NOC’s 2023 sales indicates an improvement of 5.6% from the 2022 reported figure.
RTX Technologies’ (RTX - Free Report) Missiles & Defense is a leading designer, developer, integrator, producer and sustainer of integrated air and missile defense systems. The unit serves as a prime contractor or major subcontractor on numerous missiles and related programs with the U.S. Department of Defense.
RTX’s long-term earnings growth rate is 7.9%. The Zacks Consensus Estimate for RTX’s 2023 sales indicates an improvement of 9.9% from the 2022 reported figure.
General Dynamics’ (GD - Free Report) Ordnance and Tactical Systems is the system integrator of the 2.75-inch Hydra-70 family of rockets. It also produces composite rocket motor cases and launch tubes for tactical and strategic missiles.
General Dynamics boasts a long-term earnings growth rate of 8.9%. The Zacks Consensus Estimate for GD’s 2023 sales indicates an improvement of 7.3% from the 2022 reported figure.
Price Movement
In the past year, shares of Lockheed have surged 6.4% against the industry’s decline of 4.9%.
Image: Bigstock
Lockheed (LMT) Wins Contract to Aid Missile Flight Testing
Lockheed Martin Corp.’s (LMT - Free Report) business segment, Space, recently clinched a modification contract involving support for missile flight test demonstrations. The award has been offered by the Strategic Systems Programs, Washington, D.C.
Details of the Deal
Valued at $315.9 million, the contract is projected to be completed by Feb 25, 2025. Per the terms of the deal, Lockheed will provide design, development, build, and integration of equipment for missile flight test demonstrations and fielding.
Majority of the work related to this contract will be carried out in Littleton, CO.
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.
Notably, Lockheed’s Space business unit, apart from developing satellites and space transportation system, also builds strike missile as well as missile defense systems. Its major programs include Trident II D5 Fleet Ballistic Missile, a program with the U.S. Navy for the only submarine-launched intercontinental ballistic missile currently in production in the United States. The unit also designs Next Generation Interceptor, a program with the Missile Defense Agency, utilizing next generation propulsion and sensors to provide homeland missile defense.
As one of the major missile makers in the United States and with such remarkable missile systems in its product portfolio, Lockheed enjoys a strong demand base in the missile defense market. The latest contract win is a bright example of that.
Growth Prospects
Per a report from Mordor Intelligence, the missiles and missile defense system market is anticipated to witness a CAGR of 4.8% during the 2023-2028 period. Such an expanding market is likely to benefit LMT as it enjoys a solid position in the military missile market.
Some other prominent defense majors that have a strong position in the missile and associated parts manufacturing industry and are thus also likely to enjoy the perks of the expanding missile defense market are discussed below.
Northrop Grumman (NOC - Free Report) is a prominent developer of missile systems and counter systems, including strategic deterrents, subsystems and components. To strengthen its position in the missile market, Northrop acquired Orbital ATK in 2018, which used to be one of the industry leaders in providing missile components across air, sea and land-based systems.
The company has a long-term earnings growth rate of 4.1%. The Zacks Consensus Estimate for NOC’s 2023 sales indicates an improvement of 5.6% from the 2022 reported figure.
RTX Technologies’ (RTX - Free Report) Missiles & Defense is a leading designer, developer, integrator, producer and sustainer of integrated air and missile defense systems. The unit serves as a prime contractor or major subcontractor on numerous missiles and related programs with the U.S. Department of Defense.
RTX’s long-term earnings growth rate is 7.9%. The Zacks Consensus Estimate for RTX’s 2023 sales indicates an improvement of 9.9% from the 2022 reported figure.
General Dynamics’ (GD - Free Report) Ordnance and Tactical Systems is the system integrator of the 2.75-inch Hydra-70 family of rockets. It also produces composite rocket motor cases and launch tubes for tactical and strategic missiles.
General Dynamics boasts a long-term earnings growth rate of 8.9%. The Zacks Consensus Estimate for GD’s 2023 sales indicates an improvement of 7.3% from the 2022 reported figure.
Price Movement
In the past year, shares of Lockheed have surged 6.4% against the industry’s decline of 4.9%.
Image Source: Zacks Investment Research
Zacks Rank
Lockheed currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.