Back to top

Image: Shutterstock

Lockheed's (LMT) Arm Wins Contract to Assist CH-53K Helicopter

Read MoreHide Full Article

Lockheed Martin Corp.’s (LMT - Free Report) arm, Sikorsky, recently clinched a contract to provide spare parts for the CH-53K helicopter. Valued at $12 million, the deal has been awarded by the Naval Supply Systems Command Weapon Systems Support, Philadelphia, PA.

Per the deal, LMT will procure eight air cycle machines, 21 hinge cuff assembly three parts, 21 hinge cuff assembly six parts, 21 hinge cuff assembly five parts, 21 hinge cuff assembly four parts and 30 hinge cuff assembly 1 2 7 parts to support the CH-53K aircraft.

The contract is expected to be complete by October 2026. The work related to this deal will be carried out in Stratford, CT.

What’s Favoring Lockheed?

Nations are increasing their defense spending on military arms and ammunition in response to perceived security threats and geopolitical tensions as enhanced military capabilities can serve as a deterrent for any potential threats of warfare. Defense spending on military helicopters has increased considerably as technologically advanced helicopters can enhance military operations, making them essential for their missions.

Such accelerated spending tends to benefit LMT as its Sikorsky business unit excels in manufacturing military helicopters that efficiently serve the U.S. Government and its allied nations’ demands and requirements.

Lockheed’s product portfolio includes notable programs like Black Hawk, Seahawk and CH-53K King Stallion heavy-lift helicopters, which continue to attract customers and result in a significant order inflow for the company, like the latest one. This tends to boost its revenue generation prospects.

Growth Prospects

Per a report from the Mordor Intelligence firm, the military rotorcraft market is likely to witness a CAGR of more than 4% during the 2023-2028 period. This unfolds immense opportunities for LMT as its versatile helicopters serve a wide range of missions and contribute to the nation’s defense and security to a great extent.

Other defense companies that stand to benefit from the expanding military rotorcraft market are as follows:

Boeing (BA - Free Report) : The company’s military rotorcraft is renowned worldwide for its leading-edge, ready and relevant solutions, which deliver proven capabilities. Boeing’s product portfolio includes combat helicopters and rotorcraft like CH-47 Chinook, AH-64 Apache, AH-6 Little Bird and V-22 Osprey.

Boeing has a long-term earnings growth rate of 4%. Its investors have gained 56.1% in the past year.

Airbus Group (EADSY - Free Report) : It is one of the world's largest suppliers of advanced military helicopters. Its product portfolio includes the H135 combat helicopter, the H145M helicopter, AS565 MBe, H160M, H175M, H215M, H225M and a few more.

Airbus’ long-term earnings growth rate is pegged at 12.4%. Shares of EADSY have returned 49.1% value to its investors in the past year.

Textron (TXT - Free Report) : Its Bell unit is one of the leading suppliers of helicopters to the U.S. government. In association with Boeing, this unit is the only supplier of military tiltrotor aircraft. Some of TXT’s key programs include the AH-1Z helicopter, V-22 tiltrotor, V-247, etc.

Textron boasts a long-term earnings growth rate of 11.7%. TXT stock has appreciated 35.2% in the past year.  

Price Movement

In the past year, shares of Lockheed Martin have increased 1.4% against the industry’s 5.6% fall.

Zacks Investment Research
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.

Published in